Stamford Man Sentenced For Fraudulently Obtaining Over $4M In COVID-19 Funds

STAMFORD, CT — A Stamford man was sentenced this week by a U.S. District Judge to 42 months in prison followed by three years of supervised release for fraudulently obtaining more than $4 million in COVID-19 relief funds from the Small Business Association (SBA), according to a news release from the U.S. Attorney's Office in the District of Connecticut.

Moustapha Diakhate, 46, must also serve three months in home detention when he is released from prison, and perform 75 hours of community service while on supervised release.

Prosecutors said Diakhate maintained an ownership or management interest in certain small business entities, including Ansonia Developers LLC, Winsbay Inc., Buyers Association Group LLC, Washington Management LLC, Diakhate Capital, Inc., and Poulson & Gold Inc.

In April 2020, Congress authorized more than $300 billion in additional Payroll Protection Program funding under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The PPP allowed qualifying small businesses and other organizations to receive unsecured loans at an interest rate of 1 percent. Loan funds needed to be used by businesses on payroll costs, interest on mortgages, rent and utilities, prosecutors noted in a news release.

Beginning in May 2020, prosecutors said, Diakhate provided Citibank and M&T Bank with false and fraudulent information during the PPP loan application process in order to obtain PPP loans for each of his six entities totaling more than $4 million.

"Diakhate then used a portion of the funds for various personal expenses, including to pay off a loan he had been provided to purchase of a 2010 Porsche Panamera Turbo, and to purchase both a Mercedes and BMW," prosecutors said in a news release. "He also purchased a $50,000 certificate of deposit with PPP funds, and disbursed funds to various and individuals unrelated to his business entities."

Citibank and M&T Bank successfully recovered more than $2 million after discovering Diakhate’s fraud. Judge Michael P. Shea ordered Diakhate to pay restitution of $1.7 million.

Diakhate was arrested on a federal criminal complaint on May 7, 2021. On Jan. 26, 2022, he pleaded guilty to one count of wire fraud and one count of making an illegal monetary transaction.

Diakhate, who is released on a $450,000 bond, is required to report to prison on Oct. 14, prosecutors said.

Individuals with information about allegations of attempted fraud involving COVID-19 are encouraged to 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 here.