Man scammed $4 million in COVID funds — and paid off his Porsche, feds say
A man scammed banks into giving him more than $4 million in undeserved COVID-19 relief money — and paid off a loan he used to buy a Porsche among other personal expenses he splurged on, federal prosecutors say.
Moustapha Diakhate, 46, of Stamford, Connecticut, also bought himself a Mercedes and a BMW with the money meant to support small, struggling businesses during the pandemic, according to the U.S. Attorney’s Office for the District of Connecticut.
“Instead, through what the defense acknowledges was simple greed, he made repeated efforts to steal and literally did steal from banks far more than he would have been able to get through conventional bank robbery,” a sentencing court document states.
A judge sentenced Diakhate to 42 months in federal prison, on Tuesday, Aug. 16 after he swindled millions in relief money authorized under the Coronavirus Aid, Relief, and Economic Security Act with his fraudulent loan applications, according to a news release from the attorney’s office.
“He tearfully expressed his remorse and shame at his sentencing hearing,” Diakhate’s attorney Jonathan Klein told McClatchy News over the phone.
Under the CARES Act, the Paycheck Protection Program, which was overseen by the Small Business Administration, provided qualifying small businesses with loans meant for “payroll costs, interest on mortgages, rent and utilities,” the news release says. Private approved lenders, such as banks, could issue these loans.
Starting in May 2020, Diakhate put down fake information on PPP loan applications he provided to two banks, Citibank and M&T Bank, on behalf of six small businesses he either owned or was involved in, according to prosecutors. As a result, the banks loaned him COVID-19 relief money.
Through his scheme, he kept obtaining “larger and larger PPP loans” that his businesses were not entitled to and received more than $4 million, a complaint states.
Citibank and M&T bank eventually caught on to Diakhate’s scheme and were able to take back $2 million of the undeserved funds, the news release says.
However, Diakhate had still successfully stolen more than $1.6 million in COVID-19 relief which he gave to family members and spent on luxury items alongside paying off his 2010 Porsche Panamera Turbo, court documents state.
Ultimately, Diakhate pleaded guilty to charges of wire fraud and making an illegal monetary transaction on Jan. 26, the release says. This came after his arrest in May 2021.
At his sentencing hearing, Klein told McClatchy News, Diakhate’s friends and family were there in support of him and six people stepped up to speak with the judge in respect to his character.
The judge ordered Diakhate to pay $1,702,479 in restitution, according to the attorney’s office. His 42-month sentence will be followed by three years of supervised release, which includes 75 hours of community service, and three months of home detention.
He was released on a $450,000 bond and must arrive at prison on Oct. 14, the release says.
Diakhate’s scheme is one of several that federal law enforcement has discovered since the pandemic began. In late December, the U.S. Secret Service estimated nearly $100 billion in COVID-19 relief money had been stolen nationwide, according to a news release.
This story was originally published August 17, 2022 at 5:27 PM with the headline "Man scammed $4 million in COVID funds — and paid off his Porsche, feds say."
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