NJ Business Owner Admits to $3.2 Million PPP Loan Fraud Scheme

Daniel Dadoun pleaded guilty to bank fraud and money laundering after submitting falsified documents to secure and seek forgiveness for pandemic relief funds.

A former New Jersey business owner has pleaded guilty to federal charges for fraudulently obtaining over $3.2 million in Paycheck Protection Program (PPP) loans intended to support businesses during the COVID-19 pandemic, U.S. Attorney Alina Habba announced.

Daniel Dadoun, 48, a citizen of Israel and former resident of South Plainfield, New Jersey, entered a guilty plea before U.S. District Judge Robert Kirsch to an information charging one count each of bank fraud and money laundering. Sentencing is scheduled for August 13, 2025.

According to court documents and statements made in court, Dadoun operated several businesses in New Jersey and, between April 2020 and August 2022, submitted multiple fraudulent PPP loan applications. These applications included false information about employee counts and payroll expenses. In support of his loan and forgiveness requests, Dadoun provided falsified tax records and altered bank statements to mislead financial institutions and the Small Business Administration.

After obtaining the funds, Dadoun allegedly submitted further fraudulent loan forgiveness applications to avoid repayment, misrepresenting his businesses' qualifications and continued eligibility for the federal relief.

The bank fraud charge carries a maximum sentence of 30 years in prison and a $1 million fine—or twice the gain or loss associated with the offense, whichever is greater. The money laundering charge is punishable by up to 10 years in prison and a $250,000 fine, or twice the value of the laundered funds.

The case was investigated by multiple federal agencies, including Homeland Security Investigations (HSI) Newark, IRS Criminal Investigation – New York Field Office, the Social Security Administration’s Office of the Inspector General, and the U.S. Attorney’s Office for the District of New Jersey. The investigation was coordinated under the COVID-19 Fraud Enforcement Strike Force, a Department of Justice initiative targeting large-scale pandemic-related financial fraud.

Assistant U.S. Attorney Katherine M. Romano of the Health Care Fraud Unit in Newark is prosecuting the case.

Federal authorities continue to encourage individuals to report suspected COVID-19 relief fraud to the National Center for Disaster Fraud via the hotline at 866-720-5721 or the online complaint form at justice.gov/disaster-fraud.