Adolphus Obioha told a federal court he made a simple mistake when he applied for two small business loans totaling more than $426,000 during the COVID-19 pandemic. In loan documents, the 65-year-old naturalized Nigerian pledged to use the entire amount to keep his driving school on Airline Highway running.
But federal authorities said he sent more than $170,000 to relatives overseas and used some of the remaining loan proceeds to buy real estate and personal vehicles.
U.S. District Judge Brian Jackson sentenced Obioha to 18 months in federal prison during a hearing Thursday at the Russell B. Long Federal Building and U.S. Courthouse.
The judge also gave Obioha three years of court supervision after his release and ordered him to pay $472,000 in restitution to the U.S. Small Business Administration, the amount federal authorities estimate Obioha's fraudulent activities have cost the agency.
Obioha pleaded guilty to one count of theft of government funds on Feb. 26. Court records show he was applying for a small business loan through the Economic Injury Disaster Loan program, which was expanded during the global pandemic to help entrepreneurs struggling to make payroll.
Obioha immigrated to the United States in 1983 at the age of 25 and enrolled at Southern University where he earned his bachelor's and master's degrees. In 1997, he founded AA Academy and Driving Institute, a driving school that advertises itself as a medical transportation business.
In June 2020, he applied for a $100,000 EIDL loan, which the Small Business Administration approved. The federal agency then paid about $104,000 into Obioha's business account, and he agreed to use the funds as “working capital” for his business, the indictment said. But in November 2020, Obioha withdrew $32,500 from the business account and used it to buy a vacation home in his native Nigeria.
A few months later, he wired three payments totaling about $12,000 to his Nigerian brother-in-law overseas.
Federal prosecutors said Obioha “doubled his funds” by applying for another $312,000 loan in April 2021. The SBA approved his loan application and deposited another $323,000 in his business account, according to court documents. This time, Obioha sent $160,000 to his brother-in-law living overseas and withdrew $12,000 to buy a vehicle for himself.
Obioha apologized and his lawyer, Dele Adebamiji, asked the judge to release the elderly business owner, whose health is deteriorating, from his prison sentence.
“He knows he made a very serious mistake and he is doing everything in his power to right that wrong,” Adebamiji said.
Justin Woodard, assistant director of the Justice Department's Criminal Fraud Section, noted that after Obioha secured the initial six-figure donation, he reapplied for more loans.
“This was not a mistake, this was a concerted effort,” Woodard said.
Judge Jackson said Obioha expressed remorse when questioned by his probation officer during his pre-sentence investigation. But he maintained he didn't know he was committing a federal felony at the time, telling the officer, “I didn't know what I was doing.” Judge Jackson was skeptical.
“There was no mistake. You calculated your actions perfectly,” the judge said.
He then accused Obioha of breaking the law in the United States, where he raised his family and sent several children to college.
“You've done very well for this country,” the judge said, “and in my view you should feel indebted to this country for accepting you and giving you the opportunities that most people in the world would love to have. But you haven't. You've taken advantage of this country.”
Judge Jackson ordered Obioha to surrender to federal authorities by June 24.
