Restaurateur Pleads Guilty To Large-Scale COVID-19 Pandemic Loan Fraud And Interstate Threats
From the U.S. Attorney’s Office, Southern District of New York:
Damian Williams, the United States Attorney for the Southern District of New York, announced that restaurateur BESIM KUKAJ pled guilty today to bank fraud conspiracy and making interstate threats. KUKAJ pled guilty before U.S. District Judge Andrew L. Carter.
U.S. Attorney Damian Williams said: “As he admitted in court today, Besim Kukaj conspired with others to try to secure more than $3.5 million dollars in government-backed loans intended for businesses devastated by the COVID-19 pandemic. Kukaj told banks that his restaurants operated with dozens of employees, when in fact he employed far fewer people. These brazen lies tricked banks into sending him approximately $1.5 million in loans. Even after his arrest, Kukaj continued to submit false loan applications. Kukaj now faces the possibility of a significant term of incarceration for these serious crimes.”
According to the allegations contained in filings in Manhattan federal court:
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the Small Business Administration’s Paycheck Protection Program (“PPP”). Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs. Businesses applying for a PPP loan must provide documentation to confirm that they have previously paid employees the compensation represented in the loan application.
From at least in or about April 2020 through at least in or about July 2020, KUKAJ, working with others, submitted applications for PPP loans to multiple banks on behalf of various restaurants KUKAJ or a relative of his owned. He did so on behalf of restaurants that were no longer operating or that had far fewer employees than were listed on the PPP loans. In total, KUKAJ and his co-conspirators applied for dozens of PPP loans, totaling approximately $3.9 million, from numerous financial institutions, using many different corporate entities, and they successfully received at least $1.5 million in PPP loans. KUKAJ was arrested in October 2020 and charged with bank fraud conspiracy and later indicted for the same charges in December 2020. He was released on pretrial release pursuant to an order that notified him of the potential effect of committing a criminal offense while on pretrial release.
In January 2021, however, KUKAJ filed another false loan application for one of the same restaurants he had previously filed a false application for in July 2020. The same month, KUKAJ also requested PPP loans for six businesses he owned and submitted false documentation about each of the six businesses. These January 2021 applications and requests were not funded by the banks to whom he submitted the false paperwork.
Separately, on November 6, 2019, at the urging of KUKAJ, a co-conspirator of his placed a telephone call, which traveled in interstate commerce, to a victim, during which call the co-conspirator threatened physical violence against the victim. KUKAJ instructed his co-conspirator to place this call because KUKAJ owed money to the victim.
KUKAJ, 42, of New Jersey, pled guilty to one count of conspiracy to commit bank fraud, which carries a maximum sentence of 40 years in prison, and one count of making interstate threats, which carries a maximum sentence of five years in prison. Under the terms of his plea agreement, KUKAJ also agreed to pay forfeiture in the amount of $1,500,000.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. KUKAJ is scheduled to be sentenced by Judge Carter on March 9, 2023, at 2:00 p.m.
Mr. Williams praised the outstanding work of FBI New York’s Balkans and Middle East Organized Crime Squad, as well as the Small Business Administration Office of the Inspector General, the Social Security Administration Office of the Inspector General, and the New York State Liquor Authority for their investigative efforts and ongoing support and assistance with the case.
The prosecution of this case is being overseen by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Samuel L. Raymond and David R. Felton are in charge of the case.