Ithaca man sentenced to serve 24 months in federal prison for pandemic loan fraud

Date: Oct. 10, 2024

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Syracuse, NY - Ejembi Onah of Ithaca, New York, was sentenced to serve 24 months in federal prison yesterday following trial convictions for two counts of wire fraud and three counts of transacting in criminally derived property for fraudulently obtaining two Paycheck Program (PPP) loans during the pandemic, receiving over $140,000 in loan proceeds, and spending those proceeds, among other things, in three separate transactions each exceeding $10,000.

United States Attorney Carla B. Freedman; Thomas Fattorusso, Executive Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (IRS-CI); and Erin Keegan, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI), made the announcement.

PPP loans were United States Small Business Administration (SBA)-guaranteed, forgivable loans authorized in the Coronavirus Aid Relief, Economic Security (CARES) Act, which was enacted in March 2020 to provide emergency financial assistance to Americans suffering adverse economic effects from the COVID-19 pandemic.

The government's evidence at Onah's October 2023 non-jury trial established that Onah submitted two fraudulent PPP loan applications to two different lenders in June 2020. Each application included false information about the payroll and number of employees at Onah's company, which he claimed was engaged in a seasonal nanotechnology business and were supported by falsified tax returns. Onah spent the more than $140,000 he received to, among other things, pay back rent at his personal residence, lease a luxury car, and pay for his daily living expenses.

United States District Judge David N. Hurd also ordered that Onah serve a two-year term of supervised release following his release from prison and pay $218,983.32 in restitution to his victims.

IRS-CI and HSI investigated the case. Assistant United States Attorneys Michael D. Gadarian and Joshua R. Rosenthal prosecuted the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.

IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.