COVID-19 ripoff, Wirecard fraud tentacles and more

Defense contractor allegedly rips off $12.8 million in COVID-19 relief aid

Opportunists with no consciences always use crises to commit fraud. The U.S. Department of Justice (DOJ) recently arrested and charged Martin Kao, 47, the CEO of Martin Defense Group of Honolulu, for allegedly bilking $12.8 million in coronavirus relief aid earmarked for small businesses.

The DOJ charged Kao with bank fraud and money laundering for falsifying loan applications for the Paycheck Protection Program (PPP) that Congress created as part of the $2 trillion CARES Act.

According to the criminal complaint, Kao lied to lenders about how many employees he had so he could receive more money than he was eligible for. The complaint said he told a bank that he had nearly 500 employees when he had fewer than 150. He allegedly used his subsidiary companies to hide that he’d already obtained PPP loans from other institutions.

The criminal complaint describes how Kao tried using his U.S. Senate connections to convince banks to fork over the bucks. Kao emailed a bank executive on April 2 that he works “very closely” with several U.S. senators who were champions of the CARES Act. He said he wanted to provide lawmakers with a positive story about securing a loan — his own.

(See Prominent Hawaii Defense Contractor Arrested For CARES Act Fraud, by Nick Grube, Honolulu Civil Beat, Sept. 30.)

Singapore charges businessman for claiming he held $1 billion for Wirecard

R. Shanmugaratnam, a Singapore businessman, faces 11 charges for falsely claiming he held about $558 million (475.5 million euros) on behalf of infamous German payments business Wirecard AG. This accusation follows six earlier charges against Shanmugaratnam. The 11 charges cover more than $1 billion (868 million euros) in cash.

According to Singapore court documents, this director of Citadelle Corporate Services Pte was charged with five counts of “willfully and with intent to defraud” falsifying letters to Wirecard, Wirecard UK & Ireland Ltd. and Cardsystems Middle East FZ LLC.

The charges say Shanmugaratnam falsely stated he’d held about 378 million euros in escrow across multiple accounts as of December 2016 and 97.5 million euros as of November 2016 in another account.

Singapore is home to Wirecard’s Asia-Pacific headquarters. The region accounted for almost 45 percent of the groups reported revenue in 2018.

(See Singapore Businessman Charged With $558 Million Wirecard Fraud, by Chanyaporn Chanjaroen, Bloomberg, Oct. 1.)

Grand Prix CFO’s tax-defrauding racer stalls

According to The Boston Globe, John F. Casey, 56, the former CFO of the defunct Boston Grand Prix race, was recently arrested on charges he allegedly failed to report income he received as a race executive, and plotting to defraud equipment and small business financing companies.

Prosecutors say the Grand Prix group made payments to or on behalf of Casey totaling $308,292 in 2015 and $601,073 in 2016, which he allegedly “failed to include in the gross income he claimed on his personal tax returns for those years.”

Prosecutors also allege that Casey secured more than $743,000 in funds from equipment financing companies purportedly to buy equipment for an ice rink he owned. They say he allegedly obtained more than $145,000 in small business loans for the rink business even though he’d sold it more than two months earlier.

Prosecutors said Casey also is charged with allegedly laundering funds from his fraud and with failing to include the income on his tax returns.

(See Former Boston Grand Prix CFO arrested for alleged tax and fraud scheme, by Travis Anderson, Boston Globe, Sept. 29.)