A Stamford man has been sentenced to prison time for his role in fraudulently obtaining more than $4 million in COVID-19 relief funds, according to the Dept. of Justice.
Officials said 46-year-old Moustapha Diakhate maintained ownership or management interest in certain small business entities. Starting in March 2020, Diakhate allegedly provided Citibank and M&T Bank with false and fraudulent information during the PPP loan application process to obtain funding for each of his six entities, court documents show.
In 2020, the CARES Act provided emergency financial assistance to Americans suffering the economic effects caused by the pandemic. Through the act, small businesses, individuals and other organizations could apply for PPP loans.
Diakhate obtained more than $4 million and used a portion of the funds for various personal expenses, including to pay off a loan he had been provided to pay off a Porsche, and to purchase two other high-end vehicles.
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According to court documents, Diakhate was connected to the following business entities: Ansonia Developers LLC, Winsbay Inc., Buyers Association Group LLC, Washington Management LLC, Diakhate Capital, Inc., and Poulson & Gold Inc.
Both Citibank and M&T Bank were able to recover more than $2 million after finding out that they'd been defrauded by Diakhate. He was ordered to pay restitution of more than $1.7 million, according to officials.
Diakhate was arrested on a federal criminal complaint in May of 2021. In Jan. of 2022, he pleaded guilty to one count of wire fraud and one count of making an illegal monetary transaction. He was released on a $450,000 bond and is required to report to prison in October, authorities said.
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The Small Business Administration Office of Inspector General, Federal Bureau of Investigation and Internal Revenue Service are investigating the matter.
Anyone with information about allegations of attempted fraud involving COVID-19 funds can report it by calling the Dept. of Justice's National Center for Disease Fraud Hotline at 866-720-5721. You can also submit a tip here.
