California Man Sentenced to 11 Years for $27 Million PPP Loan Fraud

ByMargie D. Moore

Jul 21, 2022 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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The U.S. Division of Justice said in a statement a  Southern California gentleman has been sentenced to 11 many years and a few months in jail over Paycheck Protection Program (PPP) financial loan fraud.



California Guy Sentenced for PPP Personal loan Fraud Scheme

Robert Benlevi, 53, of Encino received a 135-month sentence pursuing his March conviction for financial institution fraud, building phony statements to a financial establishment, and dollars laundering. Benlevi had been charged for publishing 27 PPP personal loan purposes to four banking companies amongst April and June 2020 on behalf of 8 companies owned by Benlevi.

According to court docket files, Benlevi sought a total of $27 million in forgivable PPP financial loans certain by the Tiny Organization Administration (SBA) beneath the Coronavirus Aid, Reduction, and Financial Stability (CARES) Act.

Benlevi sought $27 million in funding to meet up with expenses and been given $3 million that he invested on particular charges. This includes money withdrawals, payments on his credit history cards, and transfers to other individual and enterprise accounts he managed. He was also renting an oceanfront apartment in Santa Monica, the Justice Office stated.

Through the fraudulent programs, Benlevi experienced claimed that each of his firms had 100 workers and averaged a monthly payroll of $400,000, when in simple fact that the companies did not have any staff or payroll costs.

The prosecution’s proof even more confirmed that Benlevi also submitted fabricated IRS documents falsely stating that each individual of the businesses experienced an annual payroll of $4.8 million. Based mostly on Benlevi’s fraudulent loan programs, 3 of Benlevi’s companies: 1Stellar Health LLC, Bestways2 Wellness LLC, and Joyous-Health and fitness4U LLC received a full of $3 million in PPP funds.

Clamping Down of PPP Fraudsters

Via the PPP, the US authorities licensed more than $600 billion in forgivable loans to tiny enterprises. The loans had been for job retention, and other costs were being distributed in 3 limited rounds distribute between April 2020 and Might 2021. The financial loans can be totally forgiven if businesses invest 60% of it on payroll as effectively as spending desire for a mortgage, lease, and utilities. On the other hand, some companies tried to fraudulently receive and use the funds for needs not meant as part of the application.

Usually PPP fraud is committed through false statements, ‘loan stacking’ by making use of for a PPP mortgage dollars from multiple loan providers, working with the personal loan proceeds for poor or unapproved uses, or delivering phony statements for the duration of PPP personal loan audits or fraud investigations.

A short while ago a exploration paper at the College of Texas at Austin – Section of Finance – found that much more than 15% of PPP financial loans or all around 1.8 million of the PPP’s 11.8 million loans showed at minimum one particular indicator of prospective fraud.

The scientists also estimate that $76 billion in PPP financial loans was taken illicitly – amounting to nearly 10% of the program’s budget. Fintech loan providers had the best rate of suspicious PPP financial loans. They have been earning all-around 29% of all PPP financial loans but accounted for more than half of its suspicious loans to debtors.

COVID-19 Fraud Enforcement Undertaking Drive

In a bid to clamp down on PPP fraud, in Might 2021, the Lawyer Typical set up the COVID-19 Fraud Enforcement Task Drive. The target is to marshal the means of the Division of Justice in partnership with other federal agencies to bolster attempts to combat and stop pandemic-connected fraud.

Late final 12 months the Top secret Company investigations into unemployment coverage and Paycheck Defense Program (PPP) personal loan fraud resulted in the seizure of much more than $1.2 billion even though recuperating a lot more than $2.3 billion of fraudulently acquired money, and the Unemployment Insurance software.

If you have any details on any attempted fraud involving COVID-19 aid you can report it by contacting the Office of Justice’s National Heart for Disaster Fraud (NCDF) Hotline at 866-720-5721 or through the NCDF World wide web Complaint Type at https://www.justice.gov/catastrophe-fraud/ncdf-catastrophe-complaint-sort

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