A California man was arrested proper now in Los Angeles on prices of alleged monetary establishment fraud, misrepresentation in a mortgage software program and money laundering for submitting fraudulent functions for Paycheck Security Program (PPP) funds.
Primarily based on court docket docket knowledge, Robert Benlevi, 52, of Encino filed 27 monetary establishment mortgage functions with 4 banks between April and June 2020 on behalf of eight Benlevi wholly owned firms. Throughout the filings, Benlevi allegedly utilized for a whole of $ 27 million in forgivable PPP loans assured by the Small Enterprise Administration (SBA) under the Coronavirus Help, Discount and Monetary Security (CARES) Act. In his fraudulent functions, Benlevi claimed that each of his firms had 100 employees and a imply month-to-month wage of $ 400,000, although he knew the companies had no employees or payrolls. Benlevi moreover produced fake IRS paperwork falsely stating that each of the companies had an annual payroll of $ 4,800,000.
The indictment alleges that three of Benlevis firms – 1Stellar Nicely being LLC, Bestways2 Nicely being LLC, and Joyous-Health4U LLC – obtained $ 3 million in PPP funds on account of Benlevi’s fraudulent mortgage functions. Although Benlevi incorrectly acknowledged that the funds requested by way of the PPP mortgage functions might be used to pay for payroll and certain completely different enterprise payments, he instead used them for personal payments, along with cash withdrawals, funds to his non-public financial institution playing cards, and transfers to completely different non-public enterprise accounts Primarily based on the indictment. In a single day, Benlevi withdrew $ 248,000 from the Bestways2 Nicely being account in PPP funds inside the kind of cashier’s checks which were deposited into completely different accounts that Benlevi managed.
Benlevi is charged with six cases of monetary establishment fraud, six cases of misrepresentation in a mortgage software program, and 4 cases of money laundering. Each case of monetary establishment fraud and false information in a mortgage software program is punished with a most sentence of 30 years in federal jail, and the money laundering cases are each punished with a most sentence of 10 years. A federal district court docket docket determine will determine each sentence based totally on U.S. sentencing pointers and completely different licensed components.
Assistant Authorized skilled Fundamental Kenneth A. Nicely mannered Jr. of the Division of Justice’s Felony Division; Showing US Authorized skilled Tracy L. Wilkison for the Central District of California; Kristi Koons Johnson, Assistant Director of the FBI Los Angeles Division; Explicit Advisor Jeffrey D. Pittano of the Inspector Fundamental of the Federal Deposit Insurance coverage protection Firm (FDIC OIG); and Explicit Agent in Price Weston King of the SBA OIG Western Space launched.
The FBI, SBA OIG and FDIC OIG are investigating the case.
Attorneys Emily Culbertson and Helen Lee from the authorized fraud division are pursuing the case.
The fraud division oversees the prosecution of makes an try at fraud that exploit PPP. Throughout the months given that PPP began, authorized professionals for the fraud division have prosecuted better than 100 defendants in extra than 70 authorized cases. The fraud division has moreover seized better than $ 65 million in cash proceeds from fraudulently obtained PPP funds, along with fairly just a few precise property and splendid objects which were acquired with these proceeds. Additional information is likely to be found at: https://www.justice.gov/criminal-fraud/ppp-fraud.
The CARES bill, handed on March 29, 2020, was designed to produce emergency financial assist to tons of of hundreds of Individuals affected by the monetary repercussions of the COVID-19 pandemic. One provide of support from the CARES bill was its approval of as a lot as $ 349 billion. In April 2020, Congress accepted over $ 300 billion in further PPP funding.
The PPP permits licensed small firms and completely different organizations to amass loans with a time interval of two years and an fee of curiosity of 1%. PPP mortgage proceeds needs to be utilized by firms for labor costs, mortgage curiosity, lease and utilities. The PPP permits curiosity and principal waivers if firms spend the proceeds on these payments inside eight weeks of receiving them and use a minimal of 75 p.c of the waived amount on payroll.
On May 17, the Authorized skilled Fundamental established the COVID-19 Fraud Enforcement Exercise Strain to mobilize the Division of Justice’s sources in collaboration with authorities companies to step up efforts to battle and forestall pandemic-related fraud. The obligation strain helps efforts to determine and prosecute basically essentially the most accountable nationwide and worldwide authorized actors and assists authorities tasked with managing fraud prevention assist purposes, along with by supplementing and incorporating present coordination mechanisms, helpful useful resource identification and Strategies used to detect fraudulent actors and their packages, and the sharing and use of information and intelligence gained from earlier enforcement efforts. For further information on the division’s response to the pandemic, please go to https://www.justice.gov/coronavirus.
Anyone with information on allegations of fraud related to COVID-19 can report it by calling the Division of Justice’s Nationwide Coronary heart for Disaster Fraud hotline at 866-720-5721 or using the NCDF internet criticism sort at: https: // www.justice. gov / disaster-fraud / ncdf-disaster-complaint-form.
An indictment is just an accusation and all defendants are presumed innocent until confirmed accountable in a court docket docket of regulation.
