CAMDEN, NJ – Two residents of Camden County, New Jersey have been charged with their role in fraudulently obtaining federal Paycheck Protection Program (P3P) loans and economic disaster loans ( EIDL) totaling $ 1.4 million, acting U.S. lawyer Rachael A. Honig announced today.
Stephen Bennett, 45, of Berlin, New Jersey, and Rhonda Thomas, 36, of Sicklerville, New Jersey, are each charged by one count of conspiracy to commit wire fraud and bank fraud, a bank fraud chief and a chief. conspiracy to commit money laundering. Bennett and Thomas are scheduled to appear today by video conference before United States Justice of the Peace Karen M. Williams.
According to criminal complaints:
The CARES (Coronavirus Aid, Relief, and Economic Security) law is a federal law enacted in March 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One of the sources of relief provided by the CARES Act was the authorization of up to $ 349 billion in forgivable loans to small businesses for job maintenance and certain other expenses, through the P3.
The PPP allows qualifying small businesses and other organizations to receive loans, which are to be used by businesses on salary costs, mortgage interest, rent, and utilities. The PPP allows for the forgiveness of interest and principal on the PPP loan if the business spends the loan proceeds on these expense items within a designated period and uses at least a certain percentage of the PPP loan proceeds for payroll expenses.
The CARES Act authorized the Small Business Administration (SBA) to provide EIDLs of up to $ 2 million to eligible small businesses experiencing significant financial disruption due to the COVID-19 pandemic. A business can use EIDL funds for salary expenses, sick leave, production costs, and business obligations, such as debts, rent, and mortgage payments.
To get a PPP or EIDL loan, an eligible business must apply and provide information about its operations, such as number of employees, gross revenue, and cost of goods sold. Supporting documents may also be required.
Bennett, Thomas and their conspirators submitted 15 fraudulent PPP loan applications and six fraudulent EIDL loan applications to multiple lenders and the SBA on behalf of 12 alleged companies. The requests contained fraudulent statements to participating lenders, including falsified federal tax return documents and amended bank statements. According to Social Security Administration records, no salary or W-2 form was processed for any of the companies between 2018 and 2020.
Based on these alleged misrepresentations, lenders approved 13 of the PPP and EIDL applications and provided businesses with approximately $ 1.4 million in federal COVID-19 emergency assistance funds for small businesses. in trouble. Bennett and Thomas used the proceeds to purchase personal items, including vehicles and jewelry.
The counts of bank fraud and conspiracy to commit electronic and bank fraud are each punishable by up to 20 years’ imprisonment and a fine of $ 250,000, or double the gain or the gross loss resulting from the offense, whichever is greater. The count of conspiracy to commit money laundering is liable to a maximum of 10 years imprisonment and a fine of $ 250,000, or double the gross gain or loss resulting from the offense. , whichever is greater.
Acting US Attorney Honig credited Special Agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, New York Regional Office, under the direction of Special Agent in Charge Patricia Tarasca; special agents of the Social Security Administration, Office of the Inspector General, New York Field Division, under the direction of the special agent in charge John F. Grasso; FBI South Jersey Resident Agency special agents, under the direction of Special Agent in Charge Michael J. Driscoll in Philadelphia, US Department of Labor Special Agents, Office of Inspector General, New York area , under the direction of Acting Special Agent in charge Nikitas Splagounias, and inspectors from the US Postal Inspection Service, under the direction of Inspector in charge Damon Wood in Philadelphia, with the investigation leading to today’s charges. She also thanked the Pennsylvania Department of Labor and Industry, under the leadership of Acting Secretary Jennifer Berrier, for their assistance.
The government is represented by Senior Counsel Jason M. Richardson and Deputy United States Attorney Daniel A. Friedman of the Criminal Division of the United States Attorney’s Office in Camden.
The charges and allegations contained in the complaint are only charges and the accused are presumed innocent until proven guilty.