The COVID-19 outbreak has had a significant impact on practically all aspects of life, including the business world. Many companies were forced to temporarily cease operations as a result, and some even shut down altogether. In response to this, the United States government announced a Paycheck Protection Program for small businesses.
PPP Fraudster Transfers Funds to Robinhood
The purpose of this initiative was to enable small businesses to continue paying their employees while their operations were closed. However, a July 24, 2020 report states that a tech executive has been charged with trying to defraud the system. Not only this, but the man also involved his Robinhood Brokerage account in the scheme.
The executive in question is based in Seattle and was charged for applying for up to $5.5 million in the Paycheck Protection Plan. Some of this money was then laundered into his Robinhood Brokerage account. The individual in question, Mukund Mohan, had applied for eight loans under the PPP for a total of six companies.
While many of his claims are fraudulent, Mohan is actually involved in the business world. He currently acts as the Chief Technology Officer at BuildDirect.com Technologies Inc. The company specializes in linking individuals with home contractors.
Before this, he had worked in both Amazon.com Inc. and Microsoft Corp. This information was gathered via his public LinkedIn profile. However, the companies in question have not publicly commented on the issue.
Millions of Dollars in PPP Fraud
In his applications for the PPP, Mohan reported false information and inconsistencies. According to the prosecutor, the individual had claimed that one of his businesses had spent $2.3 million for payroll in 2019. He also claimed that the company had hired over a dozen employees.
Both of these facts have been proven to be false. In reality, Mohan had only acquired the company in May 2020. The US Attorney in Washington also stated that the company had no employees, and so, no funds had been spent on payroll.
After receiving the money, Mohan took steps to cover his tracks, and one of these steps was making use of Robinhood, the popular investment platform. Following the investigation, Robinhood Markets Inc. provided records of Mohan’s transactions. As per the records, he transferred $231,000 to his account on the app.
The funds being disbursed for the PPP are meant for the purposes of keeping businesses afloat during the pandemic. This includes payroll costs, interest on mortgages, rent, and utilities. Not only did Mohan submit fraudulent applications, but also misused the funds he was given.
Robinhood in 2020
It is interesting that Mohan would choose to transfer his ill-gotten funds to his Robinhood account. The platform is considered to be one of the best apps for stock trading and is very popular. It allows users to trade in both traditional and cryptocurrency assets with zero fees attached.
The platform has suffered some recent setbacks. They recently postponed their planned UK expansion due to the effects of the outbreak. This is despite raising millions in a recent Series F funding round. The recent round of funding has brought its total valuation to $8.6 billion.
What do you think of the misuse of PPP funds? What should be done to prevent such incidents in the future? Let us know your thoughts below.