A California Man Has Been Convicted of PPP Fraud and a Money-laundering Scheme.

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The US Department of Justice reported Tuesday that a California man was convicted by a federal jury of submitting fraudulent applications for monies under the Paycheck Protection Program (PPP) and money laundering (March 29).

The Paycheck Protection Program is a CARES Act programme that provides funding to small businesses to cover up to eight weeks of payroll costs and benefits.

Fraudulent PPP loan filings are not uncommon, according to the New York Times, which reported in October 2021 that more than 15% of the program’s loans, totaling $76 billion, had at least one indicator of probable fraud.

 

California updates

 

According to the DoJ announcement, between April and June 2020, 53-year-old Robert Benlevi of Encino, California, submitted 27 PPP loan applications to four different banks on behalf of eight companies he owned, totaling about $27 million in forgiving debt.

Following an examination, it was discovered that Benlevi’s enterprises had no employees or payroll expenses, despite the fact that his fraudulent PPP applications fraudulently claimed that each of the companies had 100 employees and $400,000 in average monthly payroll costs.

Benlevi was also charged with submitting forged IRS forms by falsely claiming that each of the eight enterprises had an annual payroll of $4.8 million.

Benlevi got $3 million in PPP funds prior to his arrest, which he utilised for personal purposes such as cash withdrawals, payments on personal credit cards, and rent on an oceanfront apartment in Santa Monica.

 

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Benlevi is expected to be sentenced on June 27 and faces up to 30 years in jail for each case of bank fraud and false statement, as well as up to ten years for each crime of money laundering.

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