Baoke Zhang, a 35-year-old software engineer based in the Seattle area, pled guilty on Thursday to one count of wire fraud for his scheme to defraud public and private COVID-19 relief programs.
Zhang, charged in May in the U.S. District Court for the Western District of Washington, submitted four fraudulent applications to three different lenders in an attempt to get forgivable loans from the Paycheck Protection Program, part of the government’s CARES Act launched earlier this year to assist businesses facing pandemic-related economic challenges.
Zhang created fake entities with fake payroll and tax records as part of his applications. He sought more than $1 million in PPP loans. He also submitted a fraudulent application for an Economic Injury Disaster Loan and received $10,000 from the Small Business Administration before his activity was flagged.
The Issaquah, Wash. resident also tried to defraud two non-profit organizations offering grants to help restaurant workers, as well as a “multinational technology company headquartered in Seattle” that gave grants to small businesses in the region. He claimed that he ran a small business called Wireless Kiosk in a local shopping center, but Zhang did not actually own any businesses.
Amazon was not named in the Department of Justice news release, though the Seattle tech giant has dispersed $11 million in financial assistance to businesses around its Seattle offices impacted by employees working from home.
Zhang’s sentencing is set for Jan. 29. He faces a maximum penalty of up to 20 years in prison and a fine of up to $250,000.
Zhang’s scheme is one of many PPP-related fraud cases across the country. The Justice Department said last month it charged 57 people with trying to steal more than $175 million from the PPP, The New York Times reported.
See the full plea agreement below.
