Date: November 1, 2023 Contact: newsroom@ci.irs.gov Newark, NJ — An owner of several New Jersey businesses was charged with fraudulently obtaining over $3.2 million in federal Paycheck Protection Program (PPP) loans, U.S. Attorney Philip R. Sellinger announced today. Daniel Dadoun formerly of South Plainfield, New Jersey, and who holds French, Canadian and Israeli passports, was charged by complaint with four counts of bank fraud and two counts of transacting in criminal proceeds. Dadoun made his initial appearance on Nov. 13, 2023, before U.S. Magistrate Judge André M. Espinosa in Newark federal court and was detained. "The allegations in this complaint describe the falsifying of documents in order to secure loans and then submitting fraudulent documents to have those loans forgiven. These programs were designed to help Americans struggling through the pandemic. Our office will combat this type of fraud whenever we encounter it." U.S. Attorney Philip R. Sellinger "It is not only alleged that Dadoun defrauded the Paycheck Protection Program by submitting false loan applications, but he anted up the game by submitting fraudulent loan forgiveness applications," Thomas M. Fattorusso, Special Agent in Charge of IRS Criminal Investigation (CI) New York, said. "Dadoun may have known how to work the benefit system for his own financial gain, but now it's law enforcement and the judicial system that will work to hold him accountable for his crimes." "Daniel Dadoun is alleged to have engaged in COVID-19 Paycheck Protection Program (PPP) fraud for personal gain without any regard for the United States taxpayer and undermined the public trust in government programs," Homeland Security Investigations (HSI) Newark Acting Special Agent in Charge Michael Alfonso said. "HSI takes allegations of fraud seriously and will continue to pursue these crimes vigorously." According to documents filed in this case and statements made in court: From April 2020 through August 2022, Dadoun engaged in a scheme to illegally obtain over $3.2 million in PPP loans on behalf of businesses located in New Jersey by submitting false and fraudulent loan applications. After receiving the PPP loan proceeds, Dadoun sought to keep the money by submitting false and fraudulent PPP loan forgiveness applications. The loan applications misrepresented information about the companies, including the number of employees and payroll expenses. In support of the loan applications and subsequent applications for loan forgiveness, Dadoun submitted falsified tax documents, altered and falsified bank statements, an altered and falsified lease agreement, and a false letter purportedly signed by a New Jersey accountant. The charges of bank fraud each carry a maximum penalty of 30 years in prison and a maximum fine of $1 million, or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. The charges of transacting in criminal proceeds each carry a maximum penalty of 10 years in prison and a maximum fine of $250,000, or twice the gross gain to the defendant or gross loss to the victim, or twice the amount of criminally derived property involved in the transaction, whichever is greatest. U.S. Attorney Sellinger credited special agents Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Alfonso; special agents of IRS Criminal Investigation (CI), New York Field Office, under direction of Special Agent in Charge Thomas M. Fattorusso Jr.; special agents of the Social Security Administration – Office of the Inspector General, New York Field Division, under the direction of Special Agent in Charge Sharon Mac Dermott; special agents of the U.S. Attorney's Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; and the Canada Revenue Agency with the investigation leading to the charges. The government is represented by Assistant U.S. Attorney Katherine M. Romano of the U.S. Attorney's Office Health Care Fraud Unit in Newark. The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds. The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
