Kindambu, of Leesburg, created fake payroll documentation showing that he paid out over $2.5 million a month to several dozen employees, according to a criminal complaint filed Tuesday in federal court in Alexandria, but the numbers did not match state and federal records or the amount of money spent from company accounts.
He applied for the loans in the name of Papillon Holdings and Papillon Air, according to the complaint. Prosecutors say that while he did begin paying staff in June through a company called Papillon Maintenance Services, the names did not match those on his loans and the salaries were far lower.
He used some of the proceeds to buy a Cessna plane and a Lexus automobile, according to prosecutors.
Kevin Carroll, an attorney for Kindambu, said in court that “Mr. Kindambu is a respected businessman in the community.” Kindambu was arrested and charged Tuesday and is scheduled for a detention hearing Wednesday. He did not enter a plea during Tuesday’s proceedings.
Loans under the PPP are forgiven if they are used for payroll, rent or mortgage, as required under the terms of the program. But government watchdogs have publicly warned that proper safeguards to prevent fraudulent submissions are lacking.
Since the loan program was established, the Small Business Administration’s Inspector General’s office says they have received tens of thousands of fraud tips leading to hundreds of investigations. About five dozen people have already been federally charged with fraud related to the program.