NJ Man Used Dead People's IDs To Scam $1.9M In COVID Relief: Feds

SPARTA, NJ – A 51-year-old Sussex County man was charged for claiming dead people as business partners to help collect $1.9 million in federal Paycheck Protection Program (PPP), Acting U.S. Attorney Rachael A. Honig said.

John Jhong was charged by complaint with one count of bank fraud, one count of false representation of a Social Security number and one count of money laundering. Jhong converted a portion of the money intended for distressed businesses into a cashier’s check “that was used to fund a business account,” authorities said.

According to documents filed in this case and statements made in court:

• Jhong submitted 10 fraudulent PPP loan applications to several lenders on behalf of 10 purported businesses. The PPP is overseen by the Small Business Administration designed to provide forgivable loans to small businesses affected by the coronavirus pandemic.
• Jhong’s PPP applications allegedly contained false and fraudulent representations to the participating lenders, including documentation purporting to be from the IRS.
• Jhong also fabricated the existence of numerous business partners. In some instances, the personal identifying information for Jhong’s purported business partners belonged to individuals who had been deceased for over a decade.
• Based on Jhong’s alleged misrepresentations, the lenders approved Jhong’s PPP loan applications and provided Jhong’s purported business with $1.9 million in federal COVID-19 emergency relief funds meant for distressed small businesses. Jhong then converted a portion of the proceeds into a cashier’s check that was used to fund a business account.

The count of bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater.

The count of false representation of Social Security number carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater.

The count of money laundering carries a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721.

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