An Issaquah software engineer filed bogus loan applications to apply for more than $ 1.5 million for companies financially damaged by the COVID-19 pandemic, according to federal court documents.
Baoke Zhang, 35, was charged this week with a number of wire transfer frauds and bank fraud charges, following a complaint filed in Washington’s Western District, which was unsealed on Friday. He was arrested on Friday.
Zhang reportedly submitted multiple loan applications to lenders and financial institutions in April to seek funding guaranteed by the Small Business Association (SBA) through the Paycheck Protection Program (PPP). The program, which is under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, offers small businesses forgivable loans that they can use for payroll and other expenses.
According to court documents, Zhang founded fake IT companies for his applications. On one he wrote that his company had more than 25 employees and a monthly payroll of $ 240,000. His filings said his business had been going on for at least a year, but investigators found that he had applied for a business license for each company in April.
In early May, a representative from a lender sent a message to an email address associated with Zhang’s application asking about inconsistencies in his records. The recipient replied that his circumstances had changed and that he wanted to withdraw his application. In a phone call with a representative from the second lender, a man posing as Zhang said again that, according to the complaint, he no longer needs the loans.
According to court documents, Zhang never received any funds.