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To PPP Bank Fraud China National Muge Ma Haltingly Pleads Guilty, Sept 22 Sentencing

By Matthew Russell Lee, Patreon Podcast
BBC - Guardian UK - Honduras - The Source

SDNY COURTHOUSE, June 15 – Amid mounting fraud in the U.S. Paycheck Protection Program, including banks and non-bank fintech lenders refusing to report the most basic data about what they done with the money, an investigative project of Inner City Press, on May 21, 2020 there was the arrest of Muge Ma, as known as "Hummer Mars," a Chinese national residing in Manhattan.

At 7 pm he was remanded to custody in jail as a risk of flight, see below.

 On September 11, after various other attempts, Ma tried again before Judge Richard M. Berman. He continued remand but agreed to hear Ma's Constitutional / Sixth Amendment right to counsel arguments, on September 30. Inner City Press live tweeted September 11, here and below.

   On June 15, Ma was brought into the courtroom of Judge Berman by two Marshals, for his change of plea proceeding. But it did not go smoothly. When asked to allocute to his crimes, Ma did not want to say that he had intended to defraud the banks.

  Then why was he pleading guilty? And why should he get "acceptance of responsibility" reduction in offense level at sentencing?

  Next, Ma resisted describing his aggravated identity theft. He kept saying that he applied in his own name, but possessed the email of another, with the name in it. Really?

  Then the AUSA and defense counsel had a whispered, non-public sidebar with Judge Berman, after which the allocution was accepted. Ma's parents, it appeared, were in the gallery with Inner City Press. Sentencing is set for September 22. Inner City Press will stay on these cases. Podcast here.

   Watch this site.

 Back on September 30, Judge Berman heard an application for release on bond again, and again denied it. Inner City Press again live tweeted:

Judge Richard M. Berman begins by recounting judges who've denied bail to Ma, who has a Chinese passport but if offering up a property at One West End Ave: SDNY Magistrates Judge Aaron, Judge Rakoff (to whom as Part 1 judge Ma did not appeal Judge Aaron's denial)

 Judge Berman says Ma is 36 and a Chinese national; his wife is in LA & is divorcing him. "His home in Manhattan is in a luxury high-rise." Judge Berman finds danger to the community - not physical danger, but financial danger. "Mr. Ma poses a risk of flight."

 Judge Berman says Ma's retained counsel has had 12 legal calls with him, and four on video, and is asking how he would be able to review discovery. The SDNY prosecutors reply that defense counsel does not explain how a dozen calls at this stage is not enough.

Judge Berman denies Ma's application and orders remand to be continued.

Muge Ma, the defendant, has a Mandarin interpreter.  His lawyer says Ma speaks fine English. But the MCC has not produced him. Lawyer wants him present for bail argument. Seems the proceeding may be put over - for more than a week.

 Muge Ma a/k/a Hummer Mars has hired, and is paying (unlike Michael Avenatti in SDNY) his own lawyer: Peter Katz of Princeton NJ.  MCC counsel says they are trying to produce Ma.

 Ma has arrived. Judge Berman recites that Magistrate Judges McCarthy and Cott turned him down for release, as did Judge Rakoff sitting as Part 1 judge. Will Judge Berman go a different way?

Judge Berman says he's never seen so many denials, by 3 different judges, and a re-application. Defense lawyer: There was no bail application to Judge Cott. We knew we had a date with you today. Judge Berman: It's fair to say that Judge Cott continued the remand Ma's lawyer Katz: We've just waited 47 minutes for Mr. Ma.

Judge Berman: What can we draw from that? We were trying to accommodate him with an interpreter. Nothing that we have done or said today has any bearing on the determination whether Mr. Ma is guilty

 Judge Berman: So what's different now, that should persuade us that Mr Ma is not a flight risk? Ma's lawyer Katz: The communication is difficult.  [But that's not on risk of flight] Judge Berman: You can't paint with a huge brush. What you say would apply to all

 Katz: I'm not sure if a pre-trial resolution is possible, since I can't talk to him enough. [Some might say this boils down to saying, Let him out, he might plead guilty.] Katz says he has another case with AUSA Sagar Ravi, about a defendant in another facility

 Judge Berman named another Judge, Magistrate Aaron, as turning Ma down on June 5 and says Ma didn't appeal to Judge Rakoff, also Part 1 Judge, on that day. Implying because Ma knew he would lose with Judge Rakoff, but wants to try again with Judge Berman?

 AUSA Ravi: In person legal visits in MCC will begin again on September 21. Ma's lawyer Katz: That's just testing. Judge Berman: If that's the only issue, I would suggest you submit aConstitutional brief about the attorney client contacts, not content

 Judge Berman: We've succeeded today in narrowing the issue. I'll give you a few days. I've looked at the papers and I can't imagine I'd come to a different conclusion than Judges McCarthy, Rakoff & Aaron. I'll continue the remand; I'll look at whatever you submit

Judge Berman: I'm not asking for a supplement, to what was rejected. I'm looking for something new. How long will it take you? Katz: Next Thurs?

Judge Berman: Sure. Keep it to 10 pages double spaced. US? Ravi: 1 week.  Wed Sept 30, 10:30 conference.

We will continue to cover this case.

  Inner City Press previously covered the bail (denial) hearing:

As the presentment of Muge Ma begins, he says, "For many years I have considered myself as American." Ma, charged with defrauding PPP program, graduated from UCLA Anderson School in Management in 2013.

Judge McCarthy (based in White Plains courthouse) asks Ma, Are you a U.S. citizen? Ma: Not yet, Your Honor. Ma is being very obsequious to Judge, thanking her profusely.

 AUSA Ravi says Ma lives in a condo in a brand new Manhattan condo, defrauded 5 banks for $20 million under PPP.AUSA Ravi says Ma's statement to agents reflect he may already have #COVID19. His parents were visiting from China in January, stuck here since - but seen with tablets and multiple cell phones in his condo.

Judge McCarthy ruled, This weighs toward remand [to prison]. You have the financial resources to flee to China. There's the sophisticated nature of this crime.  Remand.

    In connection with loan applications for relief available from the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”) Program, MA falsely represented to the SBA and five financial institutions that his companies, New York International Capital LLC (“NYIC”) and Hurley Human Resources LLC (“Hurley”), had hundreds of employees and paid millions of dollars in wages to those employees, when, in fact, MA appears to have been the only employee of his companies.

  U.S. District Court for the Southern District of New York U.S. Attorney Geoffrey S. Berman said, "Ma allegedly falsely represented in his applications to banks and the SBA to own two companies with hundreds of employees to whom he paid millions in wages. In truth, Ma appears to be the only employee of either company and had no legitimate claim to the funds for which he applied. 

     SBA OIG Eastern Region Special Agent-in-Charge Kevin Kupperbusch said:  “Providing false statements to gain access to SBA’s programs will be aggressively investigated by our office.  SBA OIG and its law enforcement partners are poised to root out fraud in SBA’s programs and bring wrongdoers to justice." But SBA has no time to respond to Freedom of Information Act (FOIA) requests? 

  From at least in or about March 2020 through at least on or about May 15, 2020, MA applied to the SBA and at least five banks for a total of over $20 million in Government-guaranteed loans for the his companies NYIC and Hurley (together, the “Ma Companies”) through the SBA’s PPP and EIDL Program.  In connection with these loan applications, MA represented, among other things, that he was the sole owner and executive director of the Ma Companies, that the Ma Companies were located on the sixth floor of his luxury condominium building in New York, New York, and that NYIC and Hurley together had hundreds of employees and paid millions of dollars in wages to those employees on a monthly basis.  In fact, however, MA appears to have been the only employee of NYIC since at least in or about 2019, and Hurley does not appear to have any employees... A bank approved and disbursed over approximately $800,000 in PPP loan funds for Hurley, which were frozen in connection with this investigation. 

  Inner City Press will have more on this, and other investigations. This case is US v. Ma, 20-cr-407 (Berman).


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