A federal judge has declined to dismiss fraud charges against two Mount Vernon residents who were convicted of stealing $7.8 million in pandemic relief funds.
“The evidence to support the defendants’ convictions remains overwhelming,” U.S. District Judge Nelson S. Román stated in a Nov 21 opinion.
Quadri Salahuddin, 28, and Anwar Salahuddin, 38, of Mount Vernon, and Jacob Carter, of Maryland, orchestrated a scheme in 2020 to steal Economic Injury Disaster Loans that were meant to support small businesses during the Covid-19 pandemic.
They got people to give them their personal information and then they submitted more than a thousand phony applications to the U.S. Small Business Administration. They asked for more than $10 million in disaster loans, and the SBA advanced $7.9 million.
Then the applicants kicked back a portion of the funds to the ringleaders.
This past February, after a two week trial in White Plains federal court, the jury returned guilty verdicts for conspiracy to commit wire fraud, wire fraud, and aggravated identity theft.
The defendants asked the court to dismiss two charges, acquit them on one charge, or hold a new trial.
The defendants claimed, for example, that the government presented insufficient evidence to convict them of aggravated identity theft. They argued that the government had to prove that they had used the loan applicants’ personal information “without lawful authority,” yet the applicants willingly provided their personal information so that they could get the loans.
Judge Román found that the defendants misinterpreted “unlawful authority.” The consent of the loan applicants had no bearing on the charge. It is the improper use of the personal information that is unlawful.
Three loan applicants testified that they did not own businesses or have employees but they believed they were eligible for the SBA loans.
Initially, the defendants had used their own information on loan applications, until the SBA stopped them. Thus, they needed a continuous stream of personal information to obtain the loans. Personal identity details were at the crux of the criminal conduct.
“Without the flow of personal information,” Román said, “the defendants would have not been able to commit the wire fraud.”
