Issaquah Man Sentenced In COVID Relief Scheme

ISSAQUAH, WA — A federal judge sentenced an Issaquah man to two years in prison Tuesday, months after he pleaded guilty to filing nine fraudulent applications seeking COVID-19 relief funds from the Small Business Administration, Economic Injury Disaster Loan program and the Paycheck Protection Program. Austin Hsu, 46, pleaded guilty to the scheme in January after prosecutors said he secured more than $700,000 in COVID-19 relief from six of the applications that were approved.

The U.S. Attorney's Office writes:

"Hsu, the owner and CEO of a company named Blackrock Services P.S. dba Back 2 Health Bellevue (Back 2 Health), received EIDL and PPP funds for Back 2 Health, and then used the names of Back 2 Health’s current and former employees to apply for additional PPP loans under the names of four other companies that he owned and controlled. In support of the fraudulent PPP loan applications, Hsu submitted fake federal tax filings.

Hsu also incorporated a company named Blueline Capital LLC (Blueline) in June 2020 for the purpose of applying for an EIDL loan in July 2020, and then misrepresented to the SBA that Blueline had been in business since 2017 and that, as of Jan. 31, 2020, Blueline had nine employees and gross receipts of over $1.5 million. In truth, Blueline had no business or operations."

On top of the two years in federal prison, the court ordered Hsu to pay more than $700,000 in restitution and $25,000 in fines. According to the Department of Justice, more than 100 people have been prosecuted for fraud since the PPP loans began. Federal investigators have seized more than $65 million in fraudulent funds, along with real estate and luxury items purchased with the money.