Stamford businessman is accused of stealing $4 million in COVID relief loans through Paycheck Protection Program

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A real estate developer from Stamford was in custody Friday after being charged with stealing about $4 million in emergency COVID relief loans and spending tens of thousands of dollars on pricey automobiles and rent on his luxury apartment.

The U.S. Attorney’s office said Moustapha Diakhate, who lost at least one real estate development after defaulting on bank loans, obtained about $3 million in Paycheck Protection Program loans in 2020 and another million this year.

Prosecutors said Diakhate applied for and obtained the 2021 loans last month after the bank issuing the earlier loans confronted him with what appeared to be evidence of fraud on the first set almost a year ago.

The forgivable PPP loans were authorized by Congress to enable businesses affected by the pandemic to retain employees and cover other authorized expenses. Prosecutors said state and federal employment and tax records show that none of the business entities Diakhate used to apply for loans had employees.

Diakhate, who once listed his address as Hamden, tried to develop an old mill complex in Ansonia in 2013, but lost the project after defaulting on a loan four years later.

U.S. Magistrate S. Dave Vatti ordered Diakhate held as a flight risk. He faces five years or more in prison under federal sentencing guidelines, as well as millions in fines and restitution.

Assistant U.S. Attorney Christopher W. Schmeisser said in court said that one of the banks issuing the COVID loans has recovered about $1.5 million and authorities are looking for the balance. He said $50,000 or more apparently was spent recently on back rent on his apartment and more was spent on three automobiles —a Porsche, a BMW and a Mercedes Benz.

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