The U.S. Division of Justice stated in a observation a Southern California guy has been sentenced to 11 years and 3 months in jail over Paycheck Coverage Program (PPP) mortgage fraud.
California Guy Sentenced for PPP Mortgage Fraud Scheme
Robert Benlevi, 53, of Encino gained a 135-month sentence following his March conviction for financial institution fraud, making false statements to a monetary establishment, and cash laundering. Benlevi were charged for filing 27 PPP mortgage packages to 4 banks between April and June 2020 on behalf of 8 firms owned via Benlevi.
In keeping with courtroom paperwork, Benlevi sought a complete of $27 million in forgivable PPP loans assured via the Small Trade Management (SBA) below the Coronavirus Assist, Aid, and Financial Safety (CARES) Act.
Benlevi sought $27 million in investment to satisfy bills and gained $three million that he spent on non-public bills. This comprises money withdrawals, bills on his bank cards, and transfers to different non-public and trade accounts he managed. He was once additionally renting an oceanfront condominium in Santa Monica, the Justice Division stated.
In the course of the fraudulent packages, Benlevi had claimed that every of his firms had 100 workers and averaged a per thirty days payroll of $400,000, when actually that the firms didn’t have any workers or payroll bills.
The prosecution’s proof additional confirmed that Benlevi additionally submitted fabricated IRS paperwork falsely mentioning that every of the firms had an annual payroll of $4.eight million. According to Benlevi’s fraudulent mortgage packages, 3 of Benlevi’s firms: 1Stellar Well being LLC, Bestways2 Well being LLC, and Joyous-Health4U LLC bought a complete of $three million in PPP price range.
Clamping Down of PPP Fraudsters
In the course of the PPP, the USA govt licensed over $600 billion in forgivable loans to small companies. The loans had been for task retention, and different bills had been disbursed in 3 brief rounds unfold between April 2020 and Would possibly 2021. The loans will also be totally forgiven if companies spend 60% of it on payroll in addition to paying pastime for a loan, hire, and utilities. Then again, some companies tried to fraudulently download and use the cash for functions no longer intended as a part of this system.
Ceaselessly PPP fraud is dedicated via false statements, ‘mortgage stacking’ via making use of for a PPP mortgage cash from more than one lenders, the usage of the mortgage proceeds for incorrect or unapproved functions, or offering false statements all the way through PPP mortgage audits or fraud investigations.
Not too long ago a analysis paper on the College of Texas at Austin – Division of Finance – discovered that greater than 15% of PPP loans or round 1.eight million of the PPP’s 11.eight million loans confirmed a minimum of one indication of doable fraud.
The researchers additionally estimate that $76 billion in PPP loans was once taken illicitly – amounting to just about 10% of this system’s finances. Fintech lenders had the best charge of suspicious PPP loans. They had been making round 29% of all PPP loans however accounted for greater than part of its suspicious loans to debtors.
COVID-19 Fraud Enforcement Process Pressure
In a bid to clamp down on PPP fraud, in Would possibly 2021, the Lawyer Normal established the COVID-19 Fraud Enforcement Process Pressure. The function is to marshal the sources of the Division of Justice in partnership with different federal companies to reinforce efforts to battle and save you pandemic-related fraud.
Overdue final yr the Secret Provider investigations into unemployment insurance coverage and Paycheck Coverage Program (PPP) mortgage fraud resulted within the seizure of greater than $1.2 billion whilst convalescing greater than $2.three billion of fraudulently bought price range, and the Unemployment Insurance coverage program.
If in case you have any data on any tried fraud involving COVID-19 reduction you’ll record it via calling the Division of Justice’s Nationwide Middle for Crisis Fraud (NCDF) Hotline at 866-720-5721 or throughout the NCDF Internet Grievance Shape at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
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