Alleged virus aid fraudster arrested in US

A Chinese national who tried to get $US20 million ($A30.4 million) in US federal coronavirus aid created bogus firms and claimed he was procuring virus tests and protective equipment for New York state, authorities say.

Muge Ma, 36, also claimed he was paying millions of dollars to hundreds of workers when he was really his only employee, working out of his posh Manhattan condominium, federal authorities said as they announced his arrest on Thursday.

Prosecutors said Ma claimed to a COVID-19 test kit manufacturer and a medical equipment supplier that one of his companies was representing New York state and Governor Andrew Cuomo in procuring COVID-19 test kits and personal protective equipment to respond to the pandemic.

They said he falsely claimed in a recorded call on Monday that one of his companies was a registered vendor for New York state and that the company had a large team of employees working on a deal for the state.

Manhattan US Attorney Geoffrey S. Berman called Ma's alleged crimes "as audacious as they are callous."

"Ma described one of the companies as a 'patriotic American' firm, and said of the other company that it would 'help the country reduce the high unemployment rate caused by the pandemic by helping unemployed American workers and unemployed American fresh graduates find jobs as quickly as possible,'" Berman said in a statement.

FBI Assistant Director William F. Sweeney Jr. said the arrest should serve as a warning to anyone contemplating fraud to profit in bad times.

"There are many people in desperate need of federal money right now to get them through an unbelievably difficult time. The last thing they need to hear is that a fraudster allegedly tried to steal millions of dollars for his own selfish use," he said.

Documents filed in Manhattan federal court alleged that Ma from March through last Friday applied to at least five banks to get over $US20 million in government-guaranteed loans.

Authorities said Ma submitted fraudulent and doctored bank records, tax records, insurance records, payroll records and financial statements to the banks, providing links to his companies' websites, which claimed he owned "global" companies.

Court documents allege he also falsely claimed to be a US citizen when he is a Chinese national with lawful permanent resident status in the US.

Authorities said a bank disbursed over $US800,000 in government loan funds for one of the companies, although the money was frozen during the investigation.

Ma was charged with bank fraud, wire fraud, making false statements to a bank and major fraud against the United States. Three of the charges carry a maximum sentence of 30 years in prison.