A Bergen County attorney who allegedly fraudulently obtained nearly $9 million in federal Paycheck Protection Program (PPP) loans has been indicted, Federal Officials announced.
According to officials, Jae H. Choi, 48, of Cliffside Park, previously charged by complaint, was charged by indictment on September 15, with four counts of bank fraud, four counts of false statements on a loan application, one count of aggravated identity theft, and one count of money laundering.
The indictment seeks to forfeit 11 bank accounts and one investment account for the proceeds of the fraud, as well as a million-dollar home Choi purchased in Cresskill. An arraignment date has not yet been set.
According to documents filed in this case and statements made in court:
Choi submitted four fraudulent PPP loan applications to four lenders on behalf of four businesses that purportedly provided educational services. Choi fabricated the existence of hundreds of employees, manipulated bank and tax records, and falsified a driver’s license on the applications.
Choi falsely represented to the lenders that the companies controlled by him had hundreds of employees and paid over $3 million in monthly wages.
In one instance, Choi emailed a lender falsely claiming that he just told 150 of his employees that they were losing their jobs because the PPP loan had not yet come through and that he had “watched grown men and women crying.” Choi wrote in that same email that he “sincerely hope[d]” that the lender’s employee “would never find [himself] in this kind of situation.”
Based on Choi’s alleged misrepresentations, three of the four lenders funded three businesses with an approximately $3 million PPP loan each.
Choi received a total of nearly $9 million in federal COVID-19 emergency relief funds meant for distressed small businesses.
Choi used the fraudulently obtained PPP loan proceeds to pay for numerous personal expenses, including to buy a nearly $1 million home in Cresskill, fund approximately $30,000 in remodeling and other improvements, and invest millions more in the stock market through an account held in the name of his spouse.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.
One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.
The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
The charges and allegations in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty in a court of law.