Houston hair extension entrepreneur convicted of $ 1.9 million in PPP loan fraud

Millions of small businesses have rushed to ask for federal help to keep themselves afloat in the early months of the pandemic. Lola Shalewa Barbara Kasali, a Houston businesswoman, was among that crowd, filing two applications seeking nearly $ 4 million in aid for her hair extension businesses, according to federal officials.

After two hours of deliberation, a federal jury convicted Kasali, 24, on Wednesday of two counts of misrepresenting a financial institution and two counts of bank fraud in connection with loans from the Paycheck Protection Program.

James Stafford, one of Kasali’s defense attorneys, said in an email that his legal team respected the jury’s verdict but planned to appeal. Stafford argued at trial that the prosecution did not prove Kasali was the person who completed the requests, only that they were submitted on his behalf. The defense contends that someone used Kasali’s identity to file the documents, Stafford said.

It was June 2020 when Kasali asked for help with Lola’s level and charm hair extensions, indicating that one company’s salary expenses averaged $ 775,000 per month and the other paid its employees more than $ 750,000 a month, according to records. She wrote on the claims that the two companies jointly had 107 employees, according to court documents.

She has received more than $ 1.9 million in PPP loan funding, which the Justice Department says was all obtained on the basis of false information.

Prosecutors presented evidence that there was no record of employees other than Kasali at these companies. Evidence in the case indicated that Kasali had submitted fraudulent tax records for Lola’s Level to substantiate its claims, but there is no record of the company submitting tax forms to the IRS. She also submitted false documents on her application for charming hair extensions, according to a court document.

Kasali’s sentencing was scheduled for February 25, 2022. Each count carries a maximum prison term of up to 30 years, officials said.

Kasali’s funds were seized by government officials, according to a statement. The Justice Department’s fraud section has prosecuted more than 150 defendants in more than 95 criminal cases and seized more than $ 75 million in fraudulently obtained PPP funds. Authorities also seized numerous real estate and luxury items purchased with funds fraudulently obtained under the Coronavirus Aid, Relief and Economic Security Act.

As of December, the COVID Relief Program had paid business owners more than $ 634.4 billion in P3 loans.

Editor Gabrielle Banks contributed reporting.

Comments are closed.