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Daniel Dadoun, Former NJ Businessman, Pleads Guilty to $3.2M COVID-Relief Fraud Scheme
Edited by: TJVNews.com
A former New Jersey business owner has pleaded guilty to federal charges of bank fraud and money laundering after fraudulently securing over $3.2 million in Paycheck Protection Program (PPP) loans intended to help businesses survive the COVID-19 pandemic, according to an announcement by U.S. Attorney Alina Habba and as reported on April 16th by The Morristown Minute.
Daniel Dadoun, 48, an Israeli citizen and former resident of South Plainfield, New Jersey, entered his guilty plea before U.S. District Judge Robert Kirsch. Sentencing for Dadoun has been scheduled for August 13, 2025, where he could face significant prison time and hefty financial penalties for his actions.
As detailed in The Morristown Minute report, court documents and testimony revealed that Dadoun operated several businesses in New Jersey and orchestrated a complex scheme to defraud both financial institutions and the Small Business Administration (SBA). From April 2020 through August 2022, during a time when businesses nationwide were grappling with the economic devastation caused by the pandemic, Dadoun filed multiple fraudulent PPP loan applications.
These applications included grossly exaggerated employee counts and inflated payroll expenses. To support his fraudulent claims, Dadoun submitted falsified tax documents and altered bank statements, deliberately misleading banks and government agencies tasked with disbursing and overseeing federal relief funds.
After securing millions in PPP funds, Dadoun did not stop at the initial deception. The Morristown Minute reported that he went further by filing fraudulent loan forgiveness applications, falsely asserting that his businesses maintained legitimate operational needs for the loans and continued to meet PPP eligibility criteria, in an effort to avoid repaying the federal assistance.
The crimes to which Dadoun pleaded guilty carry severe potential consequences. According to the information provided in The Morristown Minute report, the bank fraud charge alone is punishable by up to 30 years in prison and a $1 million fine, or twice the gain or loss resulting from the offense, whichever is greater. The money laundering charge adds another possible 10 years in prison and a $250,000 fine, or twice the amount of the laundered funds.
The outcome of Dadoun’s sentencing could set a major precedent as federal authorities continue to crack down on pandemic relief fraud, a form of financial crime that has surged since the introduction of massive aid packages like the CARES Act.
The investigation into Dadoun’s actions was conducted by a coalition of federal agencies, reflecting the seriousness with which authorities are treating pandemic-related fraud cases. According to The Morristown Minute, the agencies involved included the 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.
This collaborative effort was carried out under the umbrella of the COVID-19 Fraud Enforcement Strike Force, a Department of Justice initiative formed to identify and prosecute large-scale fraud schemes that targeted pandemic relief funds.
Assistant U.S. Attorney Katherine M. Romano of the Health Care Fraud Unit in Newark is leading the prosecution, emphasizing the level of federal resources committed to ensuring accountability in the aftermath of pandemic financial assistance programs.
Federal authorities have stressed the importance of public participation in rooting out pandemic-related financial crimes. As noted in The Morristown Minute report, individuals who suspect cases of COVID-19 relief fraud are urged to report them to the National Center for Disaster Fraud through the hotline at 866-720-5721 or via the online complaint form available at justice.gov/disaster-fraud.
The case against Daniel Dadoun, as chronicled by The Morristown Minute, is emblematic of a broader national effort to address the rampant abuse of emergency government programs during a time of unprecedented crisis. The U.S. government distributed billions of dollars in relief to stabilize the economy during the pandemic, and prosecutors have increasingly signaled that those who sought to exploit the system for personal gain will face aggressive legal consequences.
As authorities continue to track down and prosecute offenders, cases such as Dadoun’s serve as a stark warning: the federal government is determined to reclaim stolen taxpayer dollars and hold perpetrators accountable, no matter how elaborate their schemes.
