WTNH/YOUTUBE
Moustapha Diakhate
NEW HAVEN — A Stamford man who once promised to redevelop downtown Ansonia faces possible prison time after pleading guilty to participating in a COVID-19 loan scheme.
Moustapha Diakhate, 46, pleaded guilty Wednesday (Jan. 26) to one count of wire fraud and one count of making an illegal monetary transaction, according to a prepared statement from the U.S. Attorney Leonard C. Boyle’s office.
The wire fraud charge carries a maximum penalty of 30 years in federal prison, while the monetary transaction charge carries a maximum prison term of 10 years.
Diakhate is scheduled to be sentenced on April 21. He’s free on a $450,000 bond.
Diakhate was charged in May 2021 with wire and bank fraud in connection to the COVID-19 federal paycheck protection program. The government accused Diakhate of obtaining millions in loans and then using some of the money on non-business expenses, such as paying off automobile loans and purchasing luxury cars.
Diakhate was introduced to Ansonia by former Mayor James Della Volpe during a press conference in 2013. Diakhate had just purchased 398,107 square feet of former Farrel properties straddling both sides of Main Street in downtown Ansonia, including 501 E. Main St., the Farrel Corp.‘s former “Process Lab.”
He and his company promised mixed-use development, but did nothing with the properties. By 2016, no development plans had been submitted, and Diakhate’s company was seeking bankruptcy protection after being sued by its mortgage lender.
Shaw Growth Ventures is now building apartments downtown, while the city converted a former Farrel office building at 65 Main St. into a police station. A senior center will also be constructed within the building.
The government alleged that Diakhate listed Washington Management LLC, the company that initially purchased the Ansonia properties, and Ansonia Developers, LLC on his PPP loan applications.
“Beginning in May 2020, Diakhate provided Citibank and M&T Bank with false and fraudulent information during the PPP loan application process in order to obtain PPP loans for each of his six entities totaling more than $4 million. Diakhate then used a portion of the funds for various personal expenses, including to pay off a loan he had been provided to purchase a 2010 Porsche Panamera Turbo, and to purchase both a Mercedes and (a) BMW,” the government stated in a press release.
The Diakhate case was investigated by the Small Business Administration Office of Inspector General, the FBI, and the IRS. The case was being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
Anyone with information on fraud connected to COVID-19 loans or grants should call 866 720 5721 or visit the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
