A United States District court under Judge Christopher Boyko, on Tuesday, sentenced the Apetu of Ipetumodu in Osun State, Oba Joseph Oloyede, to 56 months in prison over a $4.2m COVID-19 relief fund fraud.
According to a statement of the United States Attorney’s Office, Northern District of Ohio, Oloyede was convicted of creating and leading a scheme that defrauded more than $4.2m from federal loan and grant programmes that was designed to support small businesses that suffered economic hardship during the COVID-19 pandemic.
The Oba was charged on a six-count charge bordering on conspiracy to commit wire fraud, engaging in monetary transactions with criminally derived property, and making and subscribing a false tax return.
Oloyede who is a dual Nigerian and American citizen residing in Medina, Ohio pleaded guilty to the charges against him.
He was also ordered to serve three years of supervised release and pay $4,408,543.38 in restitution.
He forfeited his home in Medina on Foote Road which he had acquired with proceeds of the scheme, as well as $96,006.89 in fraud proceeds seized by investigators.
According to court documents, between April 2020 and February 2022, Oloyede conspired with 62-year-old Edward Oluwasanmi of Willoughby to submit fraudulent applications for loans made available through the U.S. Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act.
The loans and the Paycheck Protection Programme and the Economic Injury Disaster Loan scheme, were intended to help small businesses survive financial shocks caused by the pandemic.
Preliminary investigations revealed that the monarch, who operated as a tax preparer and owned five businesses and one nonprofit, worked with Oluwasanmi, his tax client, who also owned three businesses in Ohio.
Both men, through these entities, submitted multiple fraudulent loan applications with falsified information securing about $1.2m for Oluwasanmi’s businesses and $1.7m for Oloyede’s entities.
Alongside, Oloyede filed fraudulent PPP and EIDL applications in the names of some of his tax clients, and collected kickbacks of between 15 and 20 per cent of the loans obtained, payments which were never declared to the Internal Revenue Service.
According to Prosecutors, Oloyede used proceeds from the scheme to acquire land, build a home, and purchase a luxury vehicle.
He was then linked to 38 fraudulent loan applications amounting to $4,213,378 disbursed by the SBA.
Oluwasanmi, on the other hand, was sentenced in July 2024 to 27 months in prison and ordered to serve three years of supervised release, pay a $15,000 fine, and return more than $1.2m in restitution for his role in the fraud.
He forfeited most of the proceeds he received, including a commercial property in South Euclid and over $600,000 traced to his financial accounts.
The U.S. Department of Transportation–Office of the Inspector General, the FBI, Cleveland Division, and IRS–Criminal Investigations, under the Pandemic Response Accountability Committee Fraud Task Force investigated the case.
Assistant United States Attorneys Edward D. Brydle and James L. Morford for the Northern District of Ohio prosecuted.
