NJ-Israeli Business Owner Gets 3+ Years in Prison for $3.2M Fraud

Daniel Dadoun, formerly of South Plainfield, submitted false documents to secure and forgive COVID-19 relief loans intended for struggling businesses.

A former New Jersey business owner has been sentenced to 41 months in federal prison for fraudulently obtaining more than $3.2 million in Paycheck Protection Program (PPP) loans intended to support small businesses during the COVID-19 pandemic.

Daniel Dadoun, 49, a citizen of Israel and formerly a resident of South Plainfield, pleaded guilty in April 2025 to charges of bank fraud and money laundering. U.S. District Judge Robert Kirsch imposed the sentence yesterday at the federal courthouse in Trenton.

According to court records and statements made in court, from April 2020 through August 2022, Dadoun engaged in a scheme to unlawfully acquire millions of dollars in PPP loans by submitting fraudulent loan applications on behalf of his New Jersey-based businesses. These applications included falsified tax records, altered bank statements, and misrepresentations about payroll and employee numbers.

After securing the PPP funds, Dadoun attempted to keep the proceeds by submitting false loan forgiveness applications, again using fabricated documentation to conceal the misuse of funds. The Paycheck Protection Program, established under the CARES Act in March 2020, was designed to help businesses cover payroll and other approved expenses during the economic downturn caused by the COVID-19 pandemic.

In addition to the prison term, Dadoun was sentenced to three years of supervised release and ordered to pay $3,239,773 in restitution.

Investigation and Enforcement

The case was investigated by a coordinated interagency effort involving:

• Homeland Security Investigations (HSI) Newark

• IRS – Criminal Investigation (New York Field Office)

• Social Security Administration – Office of the Inspector General (Boston New York Field Division)

• U.S. Attorney’s Office for the District of New Jersey

The prosecution was led by Assistant U.S. Attorney Katherine M. Romano of the Health Care Fraud Unit in Newark.

This case was part of the District of New Jersey COVID-19 Fraud Enforcement Strike Force, one of five nationwide task forces created by the U.S. Department of Justice to investigate pandemic-related financial crimes. These strike forces focus on large-scale, multi-state fraud operations, including those conducted by criminal organizations and transnational actors, with efforts driven by data analytics and led by federal prosecutors.

Public Reporting Encouraged

Authorities continue to urge the public to report suspected COVID-19 relief fraud. Tips can be submitted to the National Center for Disaster Fraud Hotline at 866-720-5721 or through the NCDF online complaint form.

The sentencing highlights ongoing federal efforts to hold accountable those who misused emergency pandemic funding, particularly at a time when many small businesses were struggling to survive.