A Chinese national living in Manhattan is facing federal charges after authorities say he schemed to try to get $20 million in government loans aimed at helping small businesses that are struggling during the coronavirus pandemic.
Federal agents arrested Muge Ma, 36, on Thursday on charges including bank fraud, wire fraud, making false statements to a bank and major fraud against the United States, according to the U.S. attorney’s office in Manhattan.
Prosecutors said Ma, who also uses the name Hummer Mars, pretended as part of his scheme that he was procuring COVID-19 test kits and personal protective equipment for New York state.
The Manhattan man falsely told the U.S. Small Business Administration and five banks that his two companies paid millions of dollars in wages to hundreds of workers, according to federal officials, who said it appears he was the sole employee.
Ma described one of his companies as a “patriotic American” firm and said the other would hire new graduates and unemployed workers in the United States to help reduce the nation’s unemployment rate, according to the U.S. attorney's office.
The defendant had an initial court appearance by video conference Thursday evening, when a prosecutor called the Chinese citizen a flight risk and asked for him to be held behind bars.
A federal defender argued for bail, saying Ma has no criminal history and had "built an entire life" in New York City after earning a master's degree in business administration at UCLA.
But U.S. Magistrate Judge Judith McCarthy ordered Ma to be remanded in custody, citing the serious charges he faces and his strong ties to China.
Ma’s federal defender couldn’t be immediately reached for comment Thursday after the virtual court proceeding.
Manhattan U.S. Attorney Geoffrey Berman said in a statement that Ma’s alleged attempts to get tens of millions in government loans meant for small businesses that are in dire financial straits were “audacious” and “callous.”
Federal officials identified Ma’s companies as New York International Capital LLC and Hurley Human Resources LLC, saying he sought funds through the Paycheck Protection Program and the Economic Injury Disaster Loan Program.
Following Ma's arrest, New York State Comptroller Thomas DiNapoli said in a statement that "using a public health crisis to commit fraud is reprehensible."
DiNapoli added that while many New Yorkers "are suffering and sacrificing" amid the pandemic, Ma "pretended to work for the government to obtain life-saving medical equipment in order to line his own pocket."
Authorities said Ma falsely claimed in a recently recorded call that one of his companies was a registered vendor for New York state and had a big team working on a deal for the state.
Before exposure of the alleged fraud, a bank paid out more than $800,000 in PPP loan money to Ma, funds that now are frozen, according to prosecutors.
Federal officials said the SBA also had approved $650,000 in loans, and an advance of at least $10,000 to Ma, who had claimed his companies operated from the sixth floor of his luxury condo building in Manhattan.
Ma also posed as a citizen of the United States, where he has lawful permanent resident status, and submitted fraudulent bank, tax, insurance and payroll records as part of the alleged fraud, prosecutors have alleged.