LI 'Mastermind Of Sprawling Conspiracy' Gets 10 Years In Covid-19 Loan Fraud: Feds

GLEN COVE, NY — A Glen Cove man deemed "the mastermind of a sprawling conspiracy" was sentenced to 10 years in prison and must pay around $9.6 million for his role in fraudulently obtaining disaster relief loans during the COVID-19 pandemic, the U.S. Attorney's office said.

Rami Saab, 44, pleaded guilty in July 2023 to conspiracy to commit wire fraud, stemming from his operation of a yearlong scheme to defraud banks and the Small Business Association of millions of dollars worth of small business loans under the Paycheck Protection Program and Economic Injury Disaster Loan Program, according to the U.S. Attorney's office.

A second defendant charged in the indictment remains at large, the office said.

Between May 2020 and May 2021, at the height of the COVID-19 pandemic, Saab and a network of co-conspirators fraudulently applied for more than $32 million in PPP and EIDL loans on behalf of shell corporations they controlled, prosecutors said.

Relying on false information and fabricated documentation supplied by Saab and his coconspirators, the SBA and private banks administrating the PPP and EIDL programs granted at least 20 such applications, resulting in the disbursement to Saab and his coconspirators of more than $9.6 million in emergency relief funds intended for distressed small businesses, according to prosecutors.

Using a web of more than 50 otherwise dormant bank accounts, Saab and his coconspirators laundered the fraud proceeds to conceal their true nature and source, before using the funds for their self-enrichment, withdrawing large portions of the loan proceeds in cash, and transferring sums to associates overseas in Turkey and elsewhere, prosecutors said, adding that PPP and EIDL provided qualifying small businesses with low-interest loans.

The Coronavirus Aid, Relief and Economic Security Act expanded EIDL to provide economic support to help offset the temporary loss of revenue experienced by businesses due to the COVID-19 pandemic and the EIDL payments did not have to be repaid.

Saab's attorney, Susan Gail Kellman of Brooklyn, could not be immediately reached for comment.

United States Attorney for the Eastern District of New York Breon Peace Peace expressed his appreciation for the Nassau County Police Department's help on the case.

"This defendant used fraud and deceit on an extraordinary scale to exploit government programs designed to keep struggling small businesses afloat during an unprecedented public health crisis,” he said. “Today’s sentence sends a strong message to all those who saw the public response to the COVID-19 pandemic as little more than a get-rich-quick scheme: this office will find you and prosecute you to the fullest extent of the
law.”

Thomas M. Fattorusso, special agent-in-charge of the Internal Revenue Service's Criminal Investigation Unit in New York, said, "Opportunists like Saab continue to victimize the American taxpayer by pulling from benefits they don’t legitimately qualify for just to satisfy their own greed."

"Saab manipulated the COVID-19 loan program so he could fill his pockets with nearly ten million dollars meant for those who suffered as a result of the pandemic," he said. "But now, thanks to strong law enforcement partnerships and an incredible prosecution team, Saab is not only going to spend years behind bars but he is also required to pay millions in restitution."

Erin Keegan, acting special agent-in-charge of Homeland Security Investigations, said that Saab "showed a blatant disregard for all legal — and moral — responsibility in the midst of an unprecedented crisis. COVID-19 relief fraud is far from a victimless crime."

“The defendant not only stole from hardworking taxpayers but took advantage of a federal program meant to truly help those experiencing tremendous financial difficulties due to the pandemic. Today’s sending is the result of outstanding coordination between our law enforcement partners to address COVID-19-related fraud," she added.

Christopher Gust, acting special agent in charge of the Treasury Inspector General for Tax Administration, said the office "aggressively pursues those who attempt to abuse the Coronavirus Aid, Relief, and Economic Security Act and its Paycheck Protection Program, which was created to assist legitimate business owners during the pandemic."

“We appreciate the efforts of our law enforcement partners and the U.S. Attorney’s office to ensure individuals engaged in criminal activity are held to account," he added.