Stamford business man pleads guilty to stealing millions in COVID relief loans through the Paycheck Protection Program
A real estate developer from Stamford pleaded guilty in federal court Wednesday to charges that he stole millions of dollars in emergency COVID relief loans and spending tens of thousands of it on pricey automobiles and rent on his luxury apartment.
Moustapha Diakhate, who had defaulted in the past on a real estate development loan, applied for a total of about $4 million in Paycheck Protection Program loans in 2020 and 2021, but received a lesser amount after the banks involved in the program froze bank accounts after suspecting fraud, federal prosecutors said.
As part of his guilty plea, Diakhate agree to restitution.
The forgivable PPP loans were authorized by Congress to enable businesses affected by the pandemic to retain employees and cover other authorized expenses. Prosecutors said state and federal employment and tax records show that none of the business entities Diakhate used to apply for loans had employees.
Diakhate, who once listed his address as Hamden, tried to develop an old mill complex in Ansonia in 2013, but lost the project after defaulting on a loan four years later.
Diakhate faces as much as about six years in prison and a fine under the sentencing guidelines used in federal court.
Federal prosecutors said Diakhate spent $50,000 or more on back rent on his apartment and more on three automobiles — a Porsche, a BMW and a Mercedes Benz.
