A California man has been convicted by a federal jury of submitting fraudulent applications for funds from the Paycheck Protection Program (PPP) and money laundering, the U.S. Department of Justice announced Tuesday (March 29).
The Paycheck Protection Program is a CARES Act program designed to provide small businesses with the funds to pay up to eight weeks of payroll costs and benefits.
Fraudulent PPP loan submissions are not uncommon, and the New York Times reported in October 2021 that more than 15% of the program’s loans, totaling $76 billion, had at least one indication of potential fraud.
According to the DoJ release, 53-year-old Robert Benlevi of Encino, California, submitted 27 PPP loan applications to four different banks between April and June 2020 on behalf of eight companies he owned, totaling some $27 million in forgivable debt.
Upon investigation, Benlevi’s companies were shown to have no employees or payroll expenses, while his fraudulent PPP applications falsely claimed that each of the companies had 100 employees and $400,000 in average monthly payroll costs.
In addition, Benlevi was also charged with submitting fabricated IRS documents by falsely stating that the eight companies each had an annual payroll of $4.8 million.
Before he was caught, Benlevi received $3 million in PPP funds, which he used for personal purposes including cash withdrawals, payments on personal credit cards and rent on an oceanfront apartment in Santa Monica.
Read more: Cybercriminal Sentenced to 66 Months for Online Fraud
Benlevi is scheduled to be sentenced on June 27 and faces up to 30 years in prison for each of the bank fraud and false statement charges, and up to 10 years in prison for each count of money laundering.
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