The U.S. District Court for the Eastern District of New York, better known as the Brooklyn Federal Court, in Downtown Brooklyn. Photo: Rob Abruzzese / Brooklyn Eagle
On Monday, a criminal complaint in Brooklyn federal court was overturned in which Leon Miles was charged with wire fraud in connection with his plan to receive more than $ 1.9 million from the Paycheck Protection Program (PPP) that Congress is in Under the Coronavirus Aid, Relief and Economic Security (CARES) Act. Miles was arrested this morning and will appear before US Judge Vera M. Scanlon this afternoon.
“At a time when so many are suffering from the devastating economic impact of the ongoing pandemic, Miles allegedly enriched himself at the taxpayer’s expense, stealing funds intended by Congress to keep businesses and workers on payroll,” said Acting United States Attorney for the Eastern District of New York Seth D. DuCharme. “Together with our agency partners, this office will bring to justice those who are exploiting a global crisis to commit such crimes.”
“We continue to see people taking advantage of the paycheck protection program, which was created to provide emergency financial aid to businesses in need of it during the pandemic,” said Sweeney, FBI deputy director. “This type of criminal behavior is a slap in the face for anyone who rules by the rules, especially while so many in our communities are suffering the financial consequences of the pandemic. The FBI will continue to aggressively prosecute those who use the money from this taxpayer-funded economic relief Program to fill their own pockets. “
“Fraudsters who have made a personal gain at the taxpayer’s expense will be brought to justice,” said McCall-Brathwaite, the special representative in charge of the SBA OIG. “Greed has no place in the SBA’s programs designed to help the country’s small businesses grappling with the challenges of the pandemic. I want to thank the US Attorney General and our law enforcement partners for their dedication and pursuit of justice. ”
“While most Americans are struggling during this pandemic, we keep seeing criminals trying to realize their dreams of a lavish lifestyle,” said the responsible IRS CI special agent Larsen. “Miles allegedly submitted a nearly $ 2 million PPP loan application, providing false information. He is said to have used some of these funds to buy luxury vehicles. These kinds of acts hurt our people, our government and our country. IRS Criminal Investigation and our law enforcement partners will work together until every abusive PPP loan is booked and criminals are brought to justice. ”
The CARES Act is a federal law that was enacted on March 29, 2020 Emergency financial aid related to the economic impact of the COVID-19 pandemic. One source of relief from the CARES Act has been the allocation of funds for the issuance of unsuccessful loans to small businesses to keep jobs and for certain other expenses under the PPP. The PPP enabled qualified small businesses to obtain unsecured loans on favorable terms that they had to use for certain expenses, including labor, mortgage interest, rent and utilities. The PPP provided for the loan to be forgiven when the recipient companies spent the proceeds on these specified expenses within a limited period of time and used a certain percentage for labor costs.
As alleged in the complaint, Miles filed an application for a $ 1,904,593.00 PPP loan on behalf of a limited liability company in Brooklyn, New York, in May 2020, falsely claiming the company had 50 employees and an average total monthly wage bill of $ 761,838.00. In support of these claims, Miles filed fraudulent personal and commercial tax returns and tax forms that were never filed with the IRS. In fact, he did not report any taxable income to the IRS during the relevant period, and his company did not file tax returns or report wages paid to employees. The loan proceeds were paid into the defendant’s personal savings account, and within days he had withdrawn hundreds of thousands of dollars, part of which he bought to buy a 2020 Bentley Continental for approximately $ 250,000 and a 2020 Cadillac Escalade for approximately $ 100,000.
The charges are allegations and the accused is presumed innocent unless and until proven guilty.
The government’s case is being followed up by United States Assistant Attorney Robert M. Pollack assisted by US Assistant Attorney Brian D. Morris of the Office Asset Forfeiture Section.
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