By: Richard L. Smith
A Hackettstown businessman was sentenced to 36 months in prison for fraudulently obtaining nearly $1.8 million in federal Paycheck Protection Program (PPP) loans, U.S. Attorney Philip R. Sellinger and Assistant Attorney General Kenneth A. Polite, Jr., of the Justice Department’s Criminal Division announced.
Federal officials said Rocco A. Malanga, 39, pleaded guilty by videoconference on June 28, 2022, before U.S. District Judge Julien X. Neals to an information charging him with one count of bank fraud and one count of money laundering. Judge Neals imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
From April 2020 through August 2020, Malanga submitted false documentation to three lenders to fraudulently obtain approximately $1.8 million in federal COVID-19 emergency relief funds for distressed small businesses.
He submitted at least three PPP loan applications for three different business entities. He fabricated the number of employees each business entity employs and their average monthly payroll.
Malanga then diverted some of the proceeds from the loans to fund a business that did not receive PPP loan funds.
In addition to the prison term, Judge Neals sentenced Malanga to three years of supervised release and ordered $1.8 million in restitution and $1.8 million in forfeiture.