A Korean American has been sentenced to prison for illegally obtaining millions of dollars during the COVID-19 pandemic by seeking an opportunity to exploit the system and enrich themselves.
Paul Kwak, 65, of Braselton, Georgia, was sentenced to three years, four months in prison to be followed by three years of supervised release and ordered to pay restitution in the amount of $1,198,300.
According to the indictment issued by federal prosecutors, Kwak fraudulently submitted dozens of applications for Economic Injury Disaster Loans (EIDLs) funded by the Small Business Administration (SBA) under the COVID-19 Stimulus Act, collecting more than $2 million. Paul Kwak conspired with others to submit millions of dollars of fraudulent EIDL applications in the names of shell companies that had no employees and conducted no business activities.
Kwak submitted dozens of applications using different numbers of his office address, which had no employees at the time, and some applications used the name of a person living in South Korea.
Kwak filed fraudulent EIDL applications and recruited and taught others to file fraudulent applications, totaling over $2 million. Kwak posted related videos on his YouTube channel, where he provided financial and investment advice before the pandemic. In a May 2020 video titled “EIDL, disaster assistance you don’t have to pay back,” Kwak explained, in Korean, that applicants could receive tens of thousands of dollars in assistance without collateral or a co-signor, using only the applicant’s electronic signature. One of his clients, according to Kwak, had recently received $150,000 in EIDL proceeds.
Kwak conspired with others, including Joosoo Choi-Bang, Jon Sun Hun, and Sook Hee Kim, each of whom previously pleaded guilty and were sentenced. Ultimately, the SBA paid over $1 million as a result of the fraudulent applications. Kwak has agreed to forfeit three homes and a Mercedes GLS 580 purchased with fraud proceeds. He has also agreed to forfeit over $1.6 million from multiple bank accounts associated with the fraud.
Paul Kwak, 65, of Braselton, Georgia, was sentenced to three years, four months in prison to be followed by three years of supervised release and ordered to pay restitution in the amount of $1,198,300. Kwak was convicted of these charges on June 20, 2023, after he pleaded guilty.
“Not only did Kwak defraud the government by applying for relief funds for companies that did not exist, but he also recruited and taught others how to do the same,” said Keri Farley, Special Agent in Charge of FBI Atlanta. Also, she emphasized that “Let this sentence be a message that the FBI will continue to hold accountable anyone who abuses taxpayer dollars and diverts them from people that actually need them.”
Meanwhile, on May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.
BY NICOLE CHANG [chang.nicole@koreadaily.com]
