ISSAQUAH – Baoke Zhang, a 35-year-old software engineer from Issaquah has been accused of defrauding the CARES ACT by filing false documents to secure more than $1 million in forgivable bank loans guaranteed by the Small Business Administration.
According to a Department of Justice press release, Zhang was charged with wire fraud and bank fraud in a federal criminal complaint filed in the Western District of Washington on Friday, May 22.
The complaint alleges Zhang provided fraudulent documents to multiple banks claiming fictitious payroll expenses associated with fictitious information technology companies that he created.
He also allegedly provided lenders with fraudulent IRS documentation alleging to federal tax withholdings for a sole proprietorship in his name for 25 employees.
“The defendant allegedly submitted false documents in a brazen scheme to acquire over 1.5 million dollars in loan funds made available for legitimate businesses adversely affected by COVID-19,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.
U.S. Attorney Brian T. Moran for the Western District of Washington said Zhang had tried more than once to defraud the Paycheck Protection Program. Zhang was unsuccessful in all attempts.
“I am pleased that the systems designed to detect and deny fraudulent payments caught his scheme before federal funds went out the door,” Moran said.
Special Agent Weston King of the SBA Office of Inspector General (SBA OIG) Western Region praised the due diligence by SBA’s lending partners to maintain the integrity of the lending programs.
“Providing false statements to gain access to SBA’s programs will be aggressively investigated by our office in partnership with our law enforcement counterparts,” King said. “I want to thank the Justice Department and our law enforcement partners for their dedication and pursuit of justice.”
Trial Attorney Amanda Vaughn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Brian Werner for the Western District of Washington are prosecuting the case.