Georgia couple indicted in COVID-19 aid defraud scheme investigation

A federal jury has indicted an Atlanta couple accused of using fraudulent applications to defraud the government out of millions of dollars in COVID-19 aid.

Officials with the U.S. Attorney's Office say 63-year-old Paul and 60-year-old Michelle Kwak planned to submit applications for Economic Impact Disaster Loans using the names of shell companies that had no employees and no business activities.

The Kwaks are believed to be connected to 70 fraudulent applications resulting in $4 million in loans.

"Fraudulent applications divert the limited pool of funds Congress allocated for pandemic relief from legitimate businesses in need of assistance," said Acting U.S. Attorney Kurt R. Erskine.  "By defrauding the Small Business Administration, the defendants harmed hardworking business owners whom the CARES Act was intended to help."

Along with their applications, officials say Paul Kwak posted videos to a Youtube channel explaining how to exploit the loan process.

Kwak allegedly titled one video published in May 2020 "EIDL, disaster assistance you don’t have to pay back" in Korean. In the video Kwak is seen explaining that applicants can receive thousands of dollars just using an electronic signature. According to Kwak in the video, one of his clients had received $150,000 in EIDL loans.

 "This alleged fraud is especially concerning because it takes advantage of a federal program set up to assist legitimate small businesses who need assistance to survive during a pandemic," said Chris Hacker, Special Agent in Charge of FBI Atlanta. "The FBI is especially vigilant of such abuse and are making it a priority to make sure government assistance goes only to those who deserve it."

The Braselton couple was indicted by a federal grand jury on May 18.

The FBI is still investigating the case.

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