A Baton Rouge business owner was federally indicted, accused of using federal small business loans to buy himself a new car and wire more than $170,000 overseas.
Adolphus Obioha, 64, received a $411,000 small-business loan from the federal government after he applied for aid during the COVID-19 pandemic to rescue his driving school, according to indictment papers. Obioha founded AA Academy & Driving Instruction Inc., in 1997. After years of operating it to train new drivers, he switched to medical transport service in 2016, court records indicate.
A grand jury indicted Obioha for wire fraud and three counts of engaging in unlawful monetary transactions on March 30. He’s set to make his first appearance Tuesday before Magistrate Judge Scott D. Johnson.
U.S. Attorney Ronald Gathe, top prosecutor for the Middle District, announced the indictment in a news release Thursday, saying Obioha faces up to 50 years in prison if he’s convicted.
Obioha applied for an Economic Injury Disaster Loan, or EIDL, in June 2020 and initially received $103,000 from the U.S. Small Business Administration. As part of the loan agreement Obioha signed, he pledged to use the funds exclusively for business purposes, prosecutors say.
SBA officials disbursed the money to a business account, but Obioha transferred $32,500 to his personal bank account and used it to buy a rental property in November 2020, according to charging documents. He sent $12,000 to an unidentified Nigerian national living overseas through three wires transactions between April and May 2021, the documents say.
Obioha sought to increase the loan amount to $411,900. The SBA granted the request and sent him another $323,000 in July 2021.
Obioha used $12,000 to buy himself a new vehicle and wired another $160,000 to the Nigerian national overseas, court records allege.
Prosecutors claim Obioha falsified the EIDL loan documents and “unjustly enriched himself.” Federal authorities have already seized $136,234.90 from Obioha’s business fund and three of his personal accounts. The government could seize more funds if Obioha is convicted.
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