El Paso Police arrest a migrant in front of Sacred Heart Church on Wednesday, Jan. 4, 2023.
New Orleans, California – A former Louisiana resident now living in California has been sentenced to just over a year in prison for defrauding a federal pandemic relief program by claiming payroll for a hotel that had long since closed its doors.
Nipun Desai, 56, was sentenced to 12 months and one day by U.S. District Judge Wendy B. Vitter after pleading guilty to making false statements related to the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In addition to prison time, Desai will serve a term of home incarceration and two years of supervised release. Authorities have ordered him to repay nearly $260,000 to federal and state officials, including $234,000 to the U.S. Small Business Administration (SBA) and $26,000 to the Louisiana Workforce Commission.
Desai’s conviction centers on a fraudulent Paycheck Protection Program (PPP) loan he secured in January 2021, during the height of federal relief efforts intended to stabilize small businesses battered by the COVID-19 pandemic.
The United States government created the PPP, part of the $2.2 trillion CARES Act signed into law in March 2020, to provide economic lifelines to small businesses across the country as lockdowns and public health restrictions took hold. The loan program was structured to encourage employers to keep staff on payroll, with the promise of loan forgiveness if the funds were used for legitimate operational costs. However, as money flowed rapidly into the economy, the emergency nature of the rollout created opportunities for significant-scale fraud.
Desai’s case is one of thousands under review by the federal government as part of its wide-ranging oversight of pandemic spending. The investigation into his conduct was led by the U.S. Department of Veterans Affairs Office of Inspector General, in coordination with the Pandemic Response Accountability Committee (PRAC), an interagency task force created to oversee the more than $5 trillion in pandemic-related federal spending.
PRAC’s work has been increasingly data-driven. In Desai’s case, the Pandemic Analytics Center of Excellence played a supporting role, utilizing forensic tools to help investigators identify inconsistencies in his application. The tools have become essential in uncovering fraud that, in the early months of the pandemic, may have slipped past overwhelmed financial institutions and under-resourced agencies.
While Desai’s sentence falls on the lighter end of possible outcomes for pandemic-related fraud, federal authorities have indicated that restitution and deterrence remain key priorities as the government continues to audit relief efforts. The sentencing also reflects a growing recognition of the complex enforcement challenges presented by a public health crisis that demanded speed but often sacrificed oversight.
Anyone with information regarding potential COVID-19 relief fraud is encouraged to contact the Department of Justice’s National Center for Disaster Fraud.
