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John Jhong, 51, of Sparta, also submitted phony IRS documents with bogus Paycheck Protection Program applications to the lenders on behalf of 10 purported businesses, Acting U.S. Attorney Rachael A. Honig said.
Jhong converted a portion of the money intended for distressed businesses into a cashier’s check “that was used to fund a business account,” Honig said.
Congress a year ago established the $670 billion rescue fund through the CARES Act, which was “designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic,” Honig said.
The program distributed an estimated $525 billion in forgivable loans to more than five million companies, saving an estimated 50 million jobs during one of the worst national crises in recent history.
Tens of thousands of those recipients, it turns out, weren’t eligible, including Jhong, the U.S. attorney said.
A federal judge in Newark allowed Jhony to remain free on an unsecured bond pending future court action on one count of false representation of a Social Security number and one count of money laundering.
The investigation was a joint effort, Honig said, of special agents from:
- IRS – Criminal Investigation;
- U.S. Postal Inspection Service;
- Social Security Administration’s Office of the Inspector General;
- Federal Deposit Insurance Corporation’s Office of the Inspector General;
- U.S. Secret Service.
She also thanked Sparta police.
Handling the case for the government are Assistant U.S. Attorney Olajide A. Araromi of Honig’s Government Fraud Unit, in Newark and Trial Attorney Chad M. Davis of the Department of Justice, Criminal Division, Money Laundering and Asset Recovery Section.
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