The U.S. Division of Justice acknowledged in a assertion a  Southern California gentleman has been sentenced to 11 a few years and some months in jail round Paycheck Safety Program (PPP) mortgage fraud.



California Male Sentenced for PPP Mortgage Fraud Scheme

Robert Benlevi, 53, of Encino obtained a 135-thirty day interval sentence following his March conviction for lender fraud, making unfaithful statements to a monetary establishment, and funds laundering. Benlevi skilled been billed for submitting 27 PPP private mortgage purposes to 4 banking corporations involving April and June 2020 on behalf of eight organizations owned by Benlevi.

In accordance to courtroom paperwork, Benlevi sought a filled with $27 million in forgivable PPP monetary loans assured by the Small Enterprise enterprise Administration (SBA) beneath the Coronavirus Help, Discount, and Financial Safety (CARES) Act.

Benlevi sought $27 million in funding to fulfill bills and gained $3 million that he put in on personal costs. This accommodates cash withdrawals, funds on his credit score historical past enjoying playing cards, and transfers to different non-public and group accounts he managed. He was additionally renting an oceanfront condominium in Santa Monica, the Justice Division defined.

By the fraudulent apps, Benlevi skilled claimed that each of his corporations skilled 100 personnel and averaged a month to month payroll of $400,000, when actually that the businesses didn’t have any workers or payroll payments.

The prosecution’s proof even additional confirmed that Benlevi additionally submitted fabricated IRS paperwork falsely stating that every of the organizations had an annual payroll of $4.8 million. Centered on Benlevi’s fraudulent monetary mortgage purposes, three of Benlevi’s firms: 1Stellar General well being LLC, Bestways2 Wellness LLC, and Joyous-General health4U LLC obtained a filled with $3 million in PPP assets.

Clamping Down of PPP Fraudsters

Via the PPP, the US governing administration authorised above $600 billion in forgivable monetary loans to little firms. The monetary loans have been for process retention, and different bills have been being distributed in 3 temporary rounds unfold involving April 2020 and Might presumably 2021. The monetary loans might be completely forgiven if organizations shell out 60% of it on payroll as completely as paying need for a property finance mortgage, rent, and utilities. Nonetheless, some organizations tried to fraudulently pay money for and use the earnings for wants not meant as portion of the plan.

Typically PPP fraud is dedicated by unfaithful statements, ‘mortgage stacking’ by making use of for a PPP private mortgage {dollars} from a number of collectors, making use of the mortgage proceeds for poor or unapproved wants, or delivering false statements in the middle of PPP mortgage audits or fraud investigations.

A short time in the past a exploration paper on the School of Texas at Austin – Division of Finance – discovered that rather more than 15% of PPP monetary loans or near 1.8 million of the PPP’s 11.8 million monetary loans confirmed on the very least one indicator of doable fraud.

The scientists additionally estimate that $76 billion in PPP loans was taken illicitly – amounting to simply about 10% of this system’s funds. Fintech mortgage corporations skilled one of the best value of suspicious PPP loans. They have been being constructing about 29% of all PPP monetary loans however accounted for extra than half of its suspicious loans to debtors.

COVID-19 Fraud Enforcement Exercise Power

In a bid to clamp down on PPP fraud, in Would possibly 2021, the Lawyer Frequent based the COVID-19 Fraud Enforcement Process Strain. The aim is to marshal the property of the Workplace of Justice in partnership with different federal corporations to bolster efforts to battle and cease pandemic-relevant fraud.

Late remaining 12 months the Secret Firm investigations into unemployment insurance coverage protection and Paycheck Security Program (PPP) financial institution mortgage fraud resulted within the seizure of greater than $1.2 billion when recuperating much more than $2.3 billion of fraudulently attained cash, and the Unemployment Insurance coverage insurance policies technique.

In case you have any data on any tried fraud involving COVID-19 discount you’ll be able to report it by calling the Division of Justice’s Nationwide Coronary heart for Disaster Fraud (NCDF) Hotline at 866-720-5721 or by the use of the NCDF Internet Criticism Kind at https://www.justice.gov/catastrophe-fraud/ncdf-catastrophe-grievance-form

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