Over the last six months, federal prosecutors and investigators have been aggressively pursuing individuals suspected of PPP loan fraud, and they are not planning on slowing down in 2022. The Department of Justice’s COVID-19 Fraud Enforcement Task Force is continuing to identify and prosecute people who made false statements on their PPP loan applications, applied for PPP loans from multiple lenders, used PPP loan money for unauthorized purposes and/or submitted a false certification for loan forgiveness.

If you are identified as someone who has committed one or more of these acts, you can be charged with one or more serious federal crimes, including wire fraud, bank fraud, making false statements on a loan application and conspiring to commit fraud. All of these potential charges must be taken very seriously, as they carry weighty sentences, such as fines up to $1,000,000 and imprisonment for up to 30 years.

A review of some of the cases publicly charged in Florida will demonstrate the seriousness of the charges and sentences being levelled at defendants accused of PPP loan fraud crimes.
 

PPP Loan Fraud Cases Publicly Charged in Florida

By early December, 2021, public records were available for twenty-two PPP loan fraud cases brought before the U.S. District Court for the Southern District of Florida. What follows is publicly available information on the charges and sentences for five of those cases, chosen for their variety and information available on charges and sentencing.

• S. v Leonel Rivero – In this case, a tax preparer (Rivero) submitted an estimated 118 PPP loan applications for approximately $2,334,064. All of the applications contained false information about income and expenses for the sole proprietors (Rivero’s accomplices) listed on the applications. Rivero was charged with wire fraud, a violation of 18 US Code § 1343, for using wire communication (electronic submission of the loan applications) to commit fraud. As part of his plea agreement, Rivero agreed to forfeit the $900,000 he and his accomplices received from the PPP program, and he was sentenced to two year in prison.
• S. v Cindi Denton – Denton, a business owner, along with co-conspirators used false statements, fraudulent payroll and tax forms and fabricated bank statements for at least 90 PPP loan applications worth at least $34 million. The defendant has been charged with wire fraud, bank fraud and attempt and conspiracy to commit wire fraud and bank fraud, in violation 18 US Code § 1343, 1344, 1349 and 2.
• S. v Diamond Blue Smith – Diamond Blue Smith, Tonye C. Johnson. Philip J. Augustin and eleven co-conspirators were charged with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud, violations of 18 US Code § 1343, 1344, 1349,and 2. Smith, Johnson and Augustin allegedly used falsified documents to obtain PPP loans for their companies. They then conspired with other defendants to apply for loans on their behalf for kickbacks. The loans were worth more than $24 million, and at least $17.4 million was disbursed by financial institutions. Smith allegedly purchased a Ferrari for $96,000, which was seized when he was arrested. Sentencing has not yet occurred.
• S. v Keyaira Bostic – Bostic obtained an $84,515 PPP loan for her business by submitting false information and false documents. She paid an alleged co-conspirator a kickback for help in preparing the loan application and referred others to the co-conspirator for similar help. Bostic was charged with bank fraud in violation of 18 US Code § 1344, three counts of wire fraud in violation of 18 US Code § 1343 and conspiracy to commit bank fraud and wire fraud in violation of 18 US Code § 1349. A federal jury convicted her of conspiracy to commit bank fraud and wire fraud and three counts of wire fraud. She was found not guilty of bank fraud. She could face up to 20 years in prison for each conviction.
• S.v David Hines – Hines submitted PPP loan applications for $13.5 million using false information about his payroll and fraudulent IRS forms to claim he needed the money to fund his companies’ payroll. He was given $3.9 million in PPP loans, which he used on personal expenses, including dating sites, luxury jewelry and clothing, resorts and a Lamborghini sports car. Following an investigation, he was charged with making false statements to a financial institution, a violation of US Code § 1014; bank fraud, a violation of US Code § 1344; and engaging in transactions with unlawful proceeds, a violation of US Code § 1957. Hines was sentenced to more than six years in prison and was ordered to forfeit the $3.4 million he obtained fraudulently, as well as the Lamborghini Huracan he purchased for approximately $318,000.

Takeaways from PPP Loan Fraud Cases Publicly Charged in Florida

While each PPP loan fraud case is different, we can arrive at some general conclusions based on our examination of the cases that have been publicly charged in the Southern District of Florida, according to the Department of Justice’s website.

• Numerous federal agencies and departments are collaborating on PPP loan fraud investigations and evidence of false information and fraudulent documents is readily accessible. If you are suspected of, and investigated for, having submitted false information and/or false documents when applying for a PPP loan, you will almost certainly be facing one or more federal fraud charges.
• Charges typically include wire fraud, bank fraud, attempt to commit wire fraud and bank fraud and conspiracy to commit wire fraud and bank fraud. A less common but highly possible charge is engaging in transactions with unlawful proceeds.
• Charges related to wire fraud are especially prevalent, since the fraudulent loan applications were submitted electronically.
• In many of the cases, defendants have applied for multi-million-dollar loans. However, the government is also charging people who applied for much smaller loan amounts with the same offenses.
• Defendants are getting sentenced to prison terms of several years or more and having to forfeit all of the PPP loan funds they received, as well as any items they purchased with the funds.

Get the Help You Need from an Experienced Florida Federal Defense Lawyer

If you are being investigated for or have been charged with a PPP loan fraud offense, you need an experienced federal defense attorney protecting your rights and advocating for the best outcome for your future. Attorney Jonathan Rose has the experience and expertise you need fighting for you.

Call 407-894-4555 or submit the form on our website to get the legal help you need.