A Stamford resident with ties to multiple businesses will serve 42 months in prison for fraudulently obtaining $4 million in COVID-19 relief money.
U.S. District Court Judge Michael P. Shea imposed the sentence Tuesday on Moustapha Diakhate, 46, of Stamford in a proceeding in Hartford.
Diakhate, who pleaded guilty in January to one count of wire fraud and one count of making an illegal monetary transaction, allegedly used some money for his own personal gain – such as to buy luxury vehicles.
After he serves his sentence, Diakhate will be on supervised release for three years, including three months in home detention. He must also perform 75 hours of community service. Diakhate, who is currently free on $450,000 bond, reports to prison on Oct. 14.
Diakhate maintained an ownership or management interest in six small business entities, including Ansonia Developers LLC, Winsbay Inc., Buyers Association Group LLC, Washington Management LLC, Diakhate Capital Inc., and Poulson & Gold Inc., according to the government.
Diakhate applied for relief funds through the Paycheck Protection Program (PPP). Recipients must use the funds for business expenses such as payroll, mortgage interest, rent and utilities. Prosecutors said Diakhate provided Citibank and M&T Bank with “false and fraudulent information” during the PPP loan application process, and ultimately obtained more than $4 million in loans.
Diakhate used some of the funds for personal expenses, including paying off his loan for a 2010 Porsche Panamera Turbo, and to purchase a Mercedes and BMW, according to the government. Diakhate also secured a $50,000 certificate of deposit with PPP funds, and gave money to individuals unrelated to his businesses.
Citibank and M&T Bank have recovered approximately $2 million to date. Shea also ordered Diakhate to pay $1.7 million in restitution.
Assistant U.S. Attorney Christopher W. Schmeisser, who prosecuted the case, said PPP funds were intended to help prevent employees “from suffering economic dislocations caused by the pandemic.”
“Instead, through what the defense acknowledges was simple greed, he made repeated efforts to steal and literally did steal from banks far more than he would have been able to get through conventional bank robbery,” Schmeisser wrote, in a pre-sentencing document to the court.
Attorney Norman Pattis of New Haven, who represented Diakhate, indicated his client is remorseful.
“The shame he feels for his conduct is a powerful indicator that he has been specifically deterred from future criminal conduct,” Pattis wrote, in a pre-sentencing memorandum.
Contact Michelle Tuccitto Sullo at msullo@newhavenbiz.com.
