The U.S. Department of Justice insists that CEO Harish Vajja used the government’s Paycheck Protection Program (PPP), created to support employers during the coronavirus, as well as the Emergency Economic Damage (EIDL) credit.
Weija received a $954,446 PPP loan and an EIDL loan of $80,700 on behalf of CybeCys. These funds were intended solely to support employee wage levels.
However, Waja transferred the funds to his individual investment account, according to law enforcement officials.
The CEO spent the money on the purchase of securities, units of exchange-traded funds and cryptocurrencies.
CybeCys and the CEO agreed to pay an administrative fine of $178,493 for violating the False Claims Act and $104 515 for violating the Financial Institutions Reform and Recovery Act of 1989.
The company has fully repaid its PPP and EIDL loans, but will not be able to qualify for them in the future.
This is not the first time such abuse of state aid has happened, law enforcement officials complain.
In 2020, a Texas resident received a $1.1 million welfare payment and invested it all in cryptocurrency.