New York man charged with practically $ four million in combating COVID-19 fraud and cash laundering | GRANDPA

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  Four charged with Covid-19 fraud |  USAO-AZ

A criminal complaint was filed in the New Jersey District today accusing a two-time New York and Florida resident of fraudulently receiving nearly $ 4 million in funds from the COVID-19 Paycheck Protection (PPP) Relief Program having washed.

New York City and West Palm Beach, 34-year-old Gregory J. Blotnick used a series of misrepresentations to fraudulently raise more than $ 3.8 million in COVID-19 PPP federal funds, according to court records. To obtain the loan money, Blotnick filed eight fake loan applications with numerous lenders on behalf of five of Blotnick’s companies, including its New York City-based hedge fund management company Brattle Street Capital LLC and affiliates. In order to obtain the PPP loans, Blotnick submitted false information, including the number of his employees, federal tax returns for his companies, and his payroll documentation, and he confirmed that he would only use the loan money for business purposes. After Blotnick fraudulently received the loans, he laundered and misused the loan proceeds, including transferring them to broker accounts and putting more than $ 3 million in the loss of stock deals.

“Not only did Blotnick fraudulently receive nearly $ 4 million in aid funds reserved for those who suffered serious financial damage from the tragic COVID-19 pandemic, but he also lied about how he would use those funds, and put millions of dollars in the loss of stock deals, “he said Assistant Attorney General Nicholas L. McQuaid of the Department of Justice’s crime department. “The Department of Justice and its law enforcement partners continue to seek to aggressively prosecute and hold accountable fraudsters who treat COVID-19 relief programs like a personal piggy bank.”

“The funds provided under the Paycheck Protection Program are intended to help businesses and their workers overcome the financial hardships caused by the COVID-19 pandemic, rather than enriching the unscrupulous few who lie like this defendant in order to raise these funds for them personal gain, ”said acting US attorney Rachael A. Honig for New Jersey District. “We will continue to protect the viability of important federal programs like this by working swiftly to identify, investigate and prosecute those who view a time of national crisis as an opportunity for fraud.”

“While the federal government is trying to support small businesses at this critical time, members of the Federal Home Loan Bank System are playing an important role in the Paycheck Protection Program,” said Robert Manchak, Special Agent in charge of the Northeast Region of the Federal Housing Finance Agency, Office of the General Inspector (FHFA-OIG). “The charges announced today are a reminder that those who mislead lenders and attempt to defraud the CARES Act will be held accountable. We are proud to work with the Department of Justice and our law enforcement partners in this unprecedented crisis. “

“These allegations show our commitment to bring those who try to defraud pandemic-related aid programs to help companies and employees in these difficult times,” said OIG’s (SSA-OIG) special envoy, John F. Grasso Social Security Administration) New York Field Division. “We will continue to work together across agencies to combat this selfish type of fraud. I want to thank the Federal Housing Finance Authority (OIG), IRS Criminal Investigation, Federal Deposit Insurance Corporation (OIG), and the U.S. Attorney’s Office for their efforts in bringing this person to justice. ”

“These allegations reflect greed and a selfish attempt to increase the personal wealth on the backs of Americans suffering from the ongoing pandemic,” said Patricia Tarasca, special agent in charge of the Federal Deposit Insurance Corporation’s OIG (FDIC-OIG) New York. “As in this case, we will continue to investigate financial crimes intensively and we appreciate the cooperation of our law enforcement colleagues.”

Blotnick is charged with eight wire fraud and six money laundering cases. The defendant is due to appear before US Judge Edward S. Kiel of the US District Court for the New Jersey District on May 19. If convicted, he faces a maximum sentence of 20 years in prison for any number of wire frauds and a maximum of 10 years in prison for any number of money laundering. A federal district judge determines each sentence based on U.S. sentencing guidelines and other legal factors.

The FHFA-OIG, the IRS-CI, the SSA-OIG and the FDIC-OIG are investigating the case.

Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Division and U.S. Assistant Attorney Fatime Meka Cano of the New Jersey District Attorney are pursuing the case.

The Coronavirus Aid, Relief and Economic Security (CARES) Act is a federal law passed March 29, 2020 designed to provide emergency financial aid to millions of Americans suffering from the economic impact of the COVID-19 pandemic. One source of relief from the CARES Act was the approval through the PPP of up to $ 349 billion in unsuccessful small business loans for job retention and certain other expenses. In April 2020, Congress approved over $ 300 billion in additional PPP funding.

The PPP enables qualified small businesses and other organizations to obtain loans with a term of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses for labor costs, mortgage interest, rents and utilities. The PPP allows the interest and principal on the PPP loan to be forgiven if the company spends the loan proceeds on these expense items within a specified period of time after receipt of the proceeds and uses at least a certain percentage of the PPP loan proceeds on wages and salaries.

The Fraud Department directs the Justice Department’s prosecution of fraud programs that exploit the CARES Act. In the months since the CARES law was passed, lawyers for the Fraud Department have prosecuted more than 100 defendants in more than 70 criminal cases. The fraud department has also seized more than $ 65 million in cash receipts from fraudulently obtained PPP funds, as well as numerous real estate and luxury goods purchased with those proceeds. Further information can be found at: https://www.justice.gov/criminal-fraud/cares-act-fraud.

Anyone with general information on attempted fraud allegations related to COVID-19 can report this by calling the Department of Justice’s National Center for Disaster Fraud hotline at 866-720-5721 or using the NCDF web complaint form at the following address : https: //www.justice. gov / disaster fraud / ncdf disaster complaint form.

A criminal complaint is just an accusation, and all defendants are presumed innocent until they have been found unequivocally guilty in a court of law.