TE RELEASE

Wednesday, May 13, 2020

Engineer Charged in Texas with COVID-Relief Fraud

Texas Engineer Fraudulently Sought More than $10 Million in CARES Act SBA Paycheck Protection Loans

An engineer has been charged in the Eastern District of Texas with allegedly filing bank loan applications fraudulently seeking more than $10 million dollars in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Shashank Rai, 30, of Beaumont, Texas, allegedly sought millions of dollars in forgivable loans guaranteed by the SBA from two different banks by claiming to have 250 employees earning wages when, in fact, no employees worked for his purported business.

Rai is charged by way of a federal criminal complaint with violations of wire fraud, bank fraud, false statements to a financial institution, and false statements to the SBA.

“As alleged, Rai fraudulently pursued millions of dollars in loans intended for legitimate small businesses suffering the economic hardships of the COVID-19 pandemic,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The department and our law enforcement partners will remain vigilant in our efforts to protect critical CARES Act relief programs from fraud and abuse.”

“The behavior in this case was very brazen,” said U.S. Attorney Joseph D. Brown of the Eastern District of Texas. “Those who submit these applications for loans or other assistance need to understand that there are people checking on the representations made, and those representations are made under oath and subject to the penalties of perjury. Federal agencies are watching for fraud, and people who lie and try to cheat the system are going to be caught and prosecuted.”

https://www.justice.gov/opa/pr/engineer-charged-texas-covid-relief-fraud

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Thursday, May 14, 2020

Former Cleveland Clinic Employee and Chinese “Thousand Talents” Participant Arrested for Wire Fraud

Assistant Attorney General for National Security John C. Demers, U.S. Attorney Justin E. Herdman of the Northern District of Ohio, and FBI Cleveland Special Agent in Charge Eric B. Smith announced a former Cleveland Clinic employee was arrested yesterday without incident by law enforcement and had his initial court appearance today.

Dr. Qing Wang, a former Cleveland Clinic Foundation (CCF) employee, is charged with false claims and wire fraud related to more than $3.6 million in grant funding that Dr. Wang and his research group received from the National Institutes of Health (NIH).

According to the criminal complaint, Dr. Wang knowingly failed to disclose to NIH that he had an affiliation with and held the position of Dean of the College of Life Sciences and Technology at the Huazhong University of Science and Technology (HUST) and received grant funds from the National Natural Science Foundation of China (CNSF) for some of the same scientific research funded by the NIH grant. As a result, Dr. Wang’s false representations and promises led NIH to approve and fund grants to Dr. Wang and his research group at CCF.

It is also alleged that Dr. Wang participated in the Thousand Talents Program, a program established by the Chinese government to recruit individuals with access to or knowledge of foreign technology and intellectual property. As a result of his admission into the TTP, China provided $3 million in research support to enhance the facilities and operations at HUST. Dr. Wang received free travel and lodging for his trips to China, to include a three-bedroom apartment on campus for his personal use. This also occurred at the time Dr. Wang was receiving NIH grant funds yet failed to disclose this affiliation to the NIH.

This case was investigated by the Cleveland Division of the FBI and the United States Department of Health and Human Services, Office of Inspector General and is being prosecuted by the U.S. Attorney’s Office – Northern District of Ohio.

A charge is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.

https://www.justice.gov/opa/pr/former-cleveland-clinic-employee-and-chinese-thousand-talents-participant-arrested-wire-fraud