After a trial before a federal jury, a California man was convicted of bank fraud, making false statements to a financial institution, and money laundering for submitting fraudulent applications seeking money from the federal Paycheck Protection Program (PPP).
According to documents presented at trial, the defendant submitted 27 PPP loan applications to four banks between April and June 2020, seeking $27 million in PPP loans on behalf of eight companies that the defendant solely owned. The defendant’s loan applications falsely represented that each company had 100 employees and average monthly payroll expenses of $400,000. The defendant also submitted falsified IRS documents claiming that his companies had annual payrolls amounting to $4.8 million.
In reality, these companies had no employees or payroll. As a result of the defendant’s fraudulent applications and supporting documentation, three of his companies received $3 million in government funds. The evidence presented at trial showed that the defendant did not use these funds for payroll and other business expenses as directed but instead used them for personal expenses, including payments on his personal credit cards and rent for an oceanfront apartment in Santa Monica. The defendant also made significant cash withdrawals, including a withdrawal of $248,000 of PPP funds in cashier’s checks, which he then transferred to other accounts he controlled.
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