On May 22, 2020, in the Western District of Washington, Baoke Zhang was arrested and charged with wire fraud and bank fraud in connection with the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to the court documents, Zhang submitted three different loan applications to two different lenders, seeking more than $1.5 million under the Paycheck Protection Program (PPP). The PPP was authorized under the CARES Act to provide forgivable loans to small businesses for job retention and certain other expenses. Zhang submitted the loan applications, which included multiple false documents and statements, in the names of fictitious entities. In order to accomplish the fraud, Zhang obtained Employer Identification Numbers (EIN) from the Internal Revenue Service (IRS) in April 2020 to document two fictitious entities. He then submitted fraudulent CARES Act-related loan applications in the names of these entities.

The loan applications contained statements that the entities had been assigned EINs years prior to the actual assignment dates for the EINs and included altered copies of IRS notices reflecting these earlier assignment dates. The applications also included falsified IRS documentation purporting to show employee and payroll amounts.

If convicted, Zhang could face a fine up to $1 million and/or up to 30 years' imprisonment.

Source:  The facts in this case narrative come from the following publicly available documents: W.D.Wash., Crim. Comp., filed May 21, 2020, and DOJ Press Rel., issued May 22, 2020.