A South Florida tax advisor was charged Tuesday with criminal information alleging cable fraud in connection with a program to obtain over 100 COVID-19 relief loans under the Paycheck Protection Program (PPP).
According to the allegations contained in the information, Miami-based Leonel Rivero, 35, owned a tax preparation company and filed approximately 118 fraudulent PPP loan applications for himself and his accomplices. Taken together, the 118 PPP loan applications searched for more than $ 2.3 million in PPP loans. On every PPP loan application, Rivero allegedly forged the applicant’s income and expenses from the previous year and filed fraudulent IRS tax forms. Rivero and his accomplices allegedly received approximately $ 975,582 in PPP loans as a result of the fraud.
Rivero is due to appear in the U.S. District Court for the Southern District of Florida on March 23. If convicted, Rivero faces a maximum sentence of 20 years in prison. A federal district judge determines each sentence based on U.S. sentencing guidelines and other legal factors.
Deputy Attorney General Nicholas L. McQuaid of the Department of Justice’s Department of Criminal Investigation; US Attorney Ariana Fajardo Orshan, US Attorney General for the Southern District of Florida; Special Agent in Charge Michael J. De Palma of the IRS-Criminal Investigation (IRS-CI) Miami Office; Amaleka McCall-Brathwaite of the United States Small Business Administration, Inspector General’s Office (SBA-OIG), Investigative Division, Eastern Regional Office made the announcement.
The IRS-CI is investigating the case with the support of the SBA-OIG.
Trial Attorney Della Sentilles of the Justice Department Fraud and US Assistant Attorney Christopher Browne of the Southern Florida District Attorney are pursuing the case. Deputy US attorney Nicole Grosnoff is handling the asset forfeiture component of 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 PPP’s approval 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 suspected COVID-19 fraud can report this by calling the National Ministry of Justice for Disaster Fraud hotline at 866-720-5721 or using the NCDF web complaint form at https: // www. justice calls .gov / disaster fraud / ncdf disaster complaint form.
Information is just an accusation and all defendants are presumed innocent until found unequivocally guilty in a court of law.