An East Elmhurst man was criminally charged with grand larceny and other crimes for allegedly creating bogus companies to secure more than $1 million in federal COVID-19 pandemic relief funds intended to keep businesses afloat and workers employed, Queens District Attorney Melinda Katz announced Thursday.
Papa Diakhate, 54, of Astoria Boulevard, was arraigned in Queens Criminal Court Oct. 11 on a complaint charging him with with one count of grand larceny in the first degree; one count of criminal possession of stolen property in the first degree; two counts of grand larceny in the second degree, two counts of criminal possession of stolen property in the second degree and two counts of falsifying business records in the first degree.
According to the charges, Diakhate allegedly submitted Federal Paycheck Protection Program (PPP) loan applications for two bogus businesses. One sought $324,900 for Mansake Corporation based on five employees and an average monthly payroll of $129,968. The second requested $858,000 for Mansake Consulting Corporation based on five employees and an average monthly payroll of $343,000.
Each application indicated that Diakhate was the sole owner and that the businesses were located at 162-02 Jamaica Ave. in Jamaica. Both loan applications were approved, and on June 29, 2020, and July 14, 2020, checks for $324,900 and $858,000 respectively were deposited into Citibank business accounts owned by Diakhate. A total of approximately $1.2 million was deposited in the accounts.
Before Citibank rescinded the loans, Diakhate spent more than $350,000 on personal expenses, contrary to the stipulation that monies were to be used exclusively for the operation of the business, including to retain workers and maintain payroll, or to make mortgage, lease and utility payments for the company. Some of these personal expenses include buying a Rolex watch, $36,874 at Amazon, $16,461 at Saks Fifth Avenue, $15,377 at Bergdorf Goodman and $13,626 at Bloomingdales. Additionally, another $56,247 was spent on travel.
“At the height of the pandemic, the health crisis was exacting a devastating human and economic toll around the world, especially here in New York,” Katz said. “Amidst the misery, the unscrupulous saw opportunities to be exploited. We are charging that the defendant was one such individual, someone who shamelessly schemed to profit from the financial hardship wrought by Covid.”
Queens Criminal Court Judge Maria Gonzalez ordered the defendant to return to court on November 27. If convicted, Diakhate faces up to 25 years in prison.