header image

[Sign Up Now] to Receive Our FREE Daily SCVTV-SCVNews Digest by E-Mail

Inside
Weather
Santa Clarita CA
Mostly clear
Mostly clear
57°F
 
Calendar
Today in
S.C.V. History
April 11
1987 - Ramona Chapel and Red Schoolhouse relocated to Heritage Junction [story]
Red Schoolhouse


Hassan Kanyike, 29, of Santa Clarita, pleaded guilty Monday to perpetrating a scheme to fraudulently obtain approximately $1.8 million in COVID-19 relief guaranteed by the Small Business Administration through the Economic Injury Disaster Loan program and the Paycheck Protection Program.

According to federal court documents, Kanyike admitted that he submitted six fraudulent PPP loan applications and two fraudulent EIDL applications. The applications sought funds to purportedly pay the salaries of employees whom he claimed worked for two of his businesses. Kanyike successfully obtained approximately $1 million through four PPP loans, and another $300,000 through two EIDL loans.

In support of the fraudulent PPP loan applications, Kanyike submitted fake federal tax filings and payroll reports. For example, in one loan application, Kanyike falsely claimed the business had 26 employees and an average monthly payroll of $168,000, and he submitted a fabricated IRS tax form claiming Falcon Motors had paid $2,022,300 in payroll in 2019.

But Kanyike admitted during his plea that the company had substantially fewer employees and substantially lower payroll. Kanyike further admitted that he obtained additional Employer Identification Numbers from the IRS in April and May 2020, so that he could apply for multiple loans for the same used-car business. Kanyike then used a substantial portion of the PPP loan proceeds for his own personal benefit.

Kanyike was arrested in December 2020 at Los Angeles International Airport just before he was about to board a flight to Dubai. At the time of his arrest, Kanyike had transferred approximately $762,000 to Uganda, his country of citizenship, from one of the business accounts that had received the loan proceeds, in violation of the terms of the PPP and EIDL program.

Kanyike pleaded guilty to one count of wire fraud before United States District Judge Virginia A. Phillips. He is scheduled to be sentenced on August 23 and faces a maximum penalty of 20 years in prison. As part of his guilty plea, Kanyike is required to pay approximately $1.3 million in restitution.

Homeland Security Investigations and Treasury Inspector General for Tax Administration investigated the case.

Assistant Chief William Johnston of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Richard E. Robinson of the U.S. Attorney’s Office for the Central District of California’s Major Fraud Section are prosecuting the case. The case was previously prosecuted by former Trial Attorney Benjamin Saltzman of the Fraud Section.

RELATED: Raymond Magana of Santa Clarita Pleads Guilty to Fraud After Receiving $1M in PPP Loans

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP, and $10 billion in low-interest loans to small businesses through the EIDL program.

In April 2020, Congress authorized more than $300 billion in additional PPP funding and $10 billion in additional EIDL funding, and in December 2020, Congress authorized another $284 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%. PPP loan proceeds must be used by businesses 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 EIDL program is designed to provide economic relief to small businesses that are currently experiencing a temporary loss of revenue. EIDL proceeds can be used to cover a wide array of working capital and normal operating expenses, such as the continuation of health care benefits, rent, utilities, and fixed-debt payments. If an applicant also obtains a loan under the PPP, the EIDL funds cannot be used for the same purpose as the PPP funds.

The Fraud Section leads the Department of Justice’s prosecution of fraud schemes that exploit the CARES Act. In the months since the CARES Act was passed, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $65 million in cash proceeds derived from fraudulently obtained PPP and EIDL funds, as well as numerous real-estate properties and luxury items purchased with such proceeds.

More information can be found at https://www.justice.gov/criminal-fraud/cares-act-fraud.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.

Comment On This Story
COMMENT POLICY: We welcome comments from individuals and businesses. All comments are moderated. Comments are subject to rejection if they are vulgar, combative, or in poor taste.
REAL NAMES ONLY: All posters must use their real individual or business name. This applies equally to Twitter account holders who use a nickname.

0 Comments

You can be the first one to leave a comment.

Leave a Comment


SCV NewsBreak
LOCAL NEWS HEADLINES
Friday, Apr 9, 2021
Parks Commissioners Asked to Advise on Pioneer Oil Refinery’s Future
The city of Santa Clarita Parks, Recreation and Community Services Commission recently met to receive an update from city staff about the status of the Pioneer Oil Refinery in Newhall.
Friday, Apr 9, 2021
Judge Halts Centennial Development Project in Tejon Ranch
A judge’s ruling this week dealt a setback to the Tejon Ranch Co.’s proposed 19,000-unit Centennial development project in the upper northwest corner of Los Angeles County.
Friday, Apr 9, 2021
Friday COVID-19 Roundup: 27,432 Total SCV Cases; County Nears 5 Million Administered Doses
Los Angeles County Public Health on Friday confirmed 48 new deaths and 752 new cases of COVID-19 countywide, with 27,432 total cases in the Santa Clarita Valley.
Keep Up With Our Facebook

Latest Additions to SCVNews.com
1987 - Ramona Chapel and Red Schoolhouse relocated to Heritage Junction [story]
Red Schoolhouse
1835 - Outlaw and Rocks/Park/High School namesake Tiburcio Vasquez born in Monterey, Calif. [story]
Tiburcio Vasquez
Nearly 100 people gathered in front of the highly anticipated Laemmle 7 in Newhall to officially open the theater to the Santa Clarita Valley community.
Laemmle Officially Opens in Old Town Newhall
The city of Santa Clarita Parks, Recreation and Community Services Commission recently met to receive an update from city staff about the status of the Pioneer Oil Refinery in Newhall.
Parks Commissioners Asked to Advise on Pioneer Oil Refinery’s Future
A judge’s ruling this week dealt a setback to the Tejon Ranch Co.’s proposed 19,000-unit Centennial development project in the upper northwest corner of Los Angeles County.
Judge Halts Centennial Development Project in Tejon Ranch
The California Community College Athletic Trainers Association has named longtime athletic trainer, and current College of the Canyons associate athletic director, Chad Peters its 2021 Athletic Trainer of the Year.
Chad Peters Named CCCATA 2021 Athletic Trainer of the Year
Los Angeles County Public Health on Friday confirmed 48 new deaths and 752 new cases of COVID-19 countywide, with 27,432 total cases in the Santa Clarita Valley.
Friday COVID-19 Roundup: 27,432 Total SCV Cases; County Nears 5 Million Administered Doses
The Santa Clarita City Council Legislative Committee briefly met Thursday morning to recommend that the City Council oppose four pieces of state legislation that would expand the state’s land-use authority.
Council Committee Recommends Opposition to State Land-Use Bills
In an effort to provide kids across the Santa Clarita Valley with a safe place to play and learn over spring break while parents are working, the Boys & Girls Club of SCV holds an annual camp.
Boys & Girls Club Holds Spring Break Camp
In recognition of public safety dispatchers' services, the California Highway Patrol joins other law enforcement agencies to recognize National Public Safety Telecommunicators Week on April 11-17, 2021.
CHP to Honor Public Safety Dispatchers During National Public Safety Telecommunicators Week
Officials in the Los Angeles County Sheriff’s Department will be hosting a virtual community discussion on child abuse prevention April 20.
L.A. County Sheriffs to Host Child Abuse Prevention Seminar
1937 - Pioneer aviator E.B. Christopher and passenger killed in crash of light plane on Ridge Route near Gorman [story]
wreckage
CBRE announced the sale of a state-of-the-art 24,164 square-foot industrial facility to Tera McHugh and John McHugh, owners of Versatile Systems, Inc.
Valencia Industrial Building Sold to Versatile Systems
As a result of the COVID-19 pandemic and accompanying public health restrictions in place for large events and community gatherings, as well as past participation numbers, the city of Santa Clarita has evaluated several components of the annual Santa Clarita Marathon and is making a necessary change to the event.
City Postpones 2021 Marathon, Event Permanently Moved to February
The Los Angeles County Department of Public Health confirmed Thursday 52 new deaths and 710 new cases of COVID-19, with 27,417 total cases in the Santa Clarita Valley.
Thursday COVID-19 Roundup: L.A. County Hospitalizations Remain Under 600; SCV Cases Total 27,417
Because of the economic downturn brought on by the COVID-19 pandemic, some pet owners may have delayed purchasing their annual pet licenses and are now subject to late penalty fees.
Animal Care & Control Temporarily Waives Pet Licensing Fees
College of the Canyons will welcome José Rivera, award-winning playwright and the first Puerto Rican screenwriter to be nominated for an Oscar, to the School of Visual & Performing Arts’ Virtual Industry Insight Series on Monday, April 12.
COC Virtual Industry Insight Series Welcomes Oscar-Nominated Screenwriter José Rivera
Santa Clarita Artists Association (SCAA) will spotlight contemporary artist Alex Schaeffer in a virtual oil demo on Monday, April 19, from 6:30 p.m. - 8:30 p.m.
April 19: Virtual Oil Demo by Artist Alex Schaeffer
Spectrum Commercial Real Estate advisors Yair Haimoff, SIOR, Randy Cude, and Matt Sreden represented the seller in the sale of a 23,817-square-foot professional office building in a prime Valencia location.
Avenue Kearny Building Sells for $6 Million
Following stakeholder planning meetings over the course of a year and a public survey period in January, the city of Santa Clarita’s 2021 Local Hazard Mitigation Plan (LHMP) draft update enters the next phase in the approval and adoption process.
Residents Can Now Review Santa Clarita’s 2021 Hazard Mitigation Draft Plan
Cassie Gratton knows how to open a Laemmle theater. The general manager of the Newhall Laemmle, which will open its doors with a ribbon-cutting this Friday, also helped to open Laemmle’s Glendale and Claremont locations.
After Several Delays, Laemmle Newhall Opens Friday
The California Department of Transportation announced that new High Occupancy Vehicle (HOV, or carpool) lanes are open to motorists on Northbound and Southbound Interstate 5 between the Ventura Freeway (State Route 134) interchange in Los Angeles and Magnolia Boulevard in Burbank.
CalTrans Announces Opening of New I-5 Carpool Lanes
1874 - Work completed at Lyon's Station (now Eternal Valley) on first version of Pioneer Oil Refinery [story]
Pioneer Oil Refinery
%d bloggers like this: