Inwood man sentenced to 4 years in prison for stealing $1.7 million in COVID-19 loans

An Inwood man was sentenced to 4 years in prison on Wednesday for stealing $1.7 million in federal pandemic business relief and using the money to buy fancy watches and stays at a luxury hotel. 

Niall Alli, 52, also was ordered to pay back the four loans that he illegally obtained from the Paycheck Protection Program.

Alli is among at least 31 Long Islanders charged with defrauding pandemic-era programs that include the PPP, COVID-19 Economic Injury Disaster Loans, the Employee Retention Credit and several other tax credits, a Newsday analysis found. 

Together, the defendants are accused of illegally obtaining more than $93 million, according to federal court filings in Central Islip, New York City and White Plains.

In Central Islip Wednesday, federal prosecutor Charles P. Kelly said Alli used the loans for “a lavish lifestyle for himself and his wife.” 

For example, Alli bought two Patek Philippe watches, totaling $138,568; stayed multiple nights in a $11,000-per-day room at the Peninsula hotel in Manhattan, and dined at the nearby French restaurant Le Bernardin with three guests for $2,235. He also paid private-school tuition of $32,000 for his son, according to a federal indictment.

Alli pleaded guilty in December 2023 to disaster relief fraud and wire fraud.

In handing down the sentence on Wednesday, U.S. District Court Judge Gary R. Brown said Alli’s conduct was “treasonous” because it occurred during the COVID-19 pandemic when Washington created the PPP to keep small businesses from closing permanently.

“This crime is staggering in proportion and overwhelming in reprehensibility,” Brown said. “The conduct was treasonous.”

Still, the judge said the four-year prison term represented a “substantial break” for Alli in recognition that he’s served 13 months in prison already and demonstrated remorse. Alli had faced up to 4 years and nine months in prison.

Alli submitted at least four PPP applications in 2020-21 for two corporations that he owned, Allicorp Inc. in Inwood and Oxypaper Inc. in Dover, Delaware. To secure $1.7 million in loan funds, he falsely claimed that each corporation had dozens of employees and monthly payrolls of hundreds of thousands of dollars, the indictment states.

Alli was initially released on bail but since July 2024 has been held in the Metropolitan Detention Center in Brooklyn. He was jailed because while out on bail he committed wire fraud and money laundering.

Prosecutors said Alli sold one of the Patek Philippe watches for $180,000 in November 2022, secured an American Express card for a shell company and sent “harassing and troublesome” emails to Isabel Casillas Guzman, then administrator of the U.S. Small Business Administration. The SBA oversees the PPP.

In court Wednesday, Alli acknowledged “misusing [the PPP] funds…I should have done better.”

He also asked for leniency, saying his young son needs a father. “I want him to understand my mistakes, to learn from them and to grow into an honorable, impactful citizen," Alli said, his voice cracking with emotion while his son wiped away tears. 

Alli’s attorney, Carl Irace, told Newsday that his client appreciated the opportunity to address the judge “but wishes the sentence was lower.”

Joseph Nocella Jr., U.S. Attorney for the Eastern District of New York, said Alli’s use of pandemic loan funds to buy nearly $500,000 in cryptocurrency and an $800 bottle of Champagne and a $600 bottle of Scotch at fine restaurants was brazen.

“Today’s sentence should also put scammers like the defendant on notice that there is no free pass for those who take advantage of important relief programs,” Nocella said after the sentencing.

Daniel Brubaker, inspector in charge of the U.S. Postal Inspection Service’s New York Division, said the relief loans that Alli secured should have gone to legitimate businesses that were forced to shut down in 2020 and 2021 to slow the coronavirus’ spread. Instead, the money paid for “a short-lived lavish lifestyle,” Brubaker said.