Encino man set up 8 fake businesses, applied for $ 27 million in fake COVID-19 loans, feds say – Daily News

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The Encino man was arrested Thursday for trying to defraud a federal payroll protection program set up last year to support businesses struggling during the coronavirus pandemic, out of an estimated $ 27 million given to several fake companies he created, prosecutors say.

Robert Benlevy, 52, was accused of fabricating details about eight companies he registered in California over several weeks in the summer of 2020, claiming that each company employs 100 people and averages $ 400,000 a month.

In an indictment released Thursday, the grand jury said it then used the companies to apply for 27 different PPP loans, each totaling $ 1 million. He received three of these loans totaling $ 3 million from one bank.

“Benlevy falsely claimed that the funds requested through PPP loan applications would be used to pay salaries, health benefits, utilities and other business expenses (of his companies,” the grand jury wrote, “when in fact Defendant Benlevi knew that the businesses did not incur any of these business expenses. ”

Instead, the grand jury reported that Benlevy transferred $ 3 million to various bank accounts he controlled, in some cases using the money to pay off credit card debt and other personal expenses.

To cover up his scheme, prosecutors said Benlevy faked tax documents for each of the companies showing 2019 payroll costs.

According to the indictment, the fictional businesses Benlevy controlled included what he called Joyous-Health4U LLC, 2GR8 Health LLC, and Topstars Health LLC.

In total, Benlevi is now facing six counts of bank fraud and false information in its loan application. He also faces four money laundering charges.

Each charge of fraud and false information carries a maximum penalty of 30 years in prison. The money laundering charge lasts 10 years.

The Benlevy case is just one of the many obvious PPP loan fraud schemes that federal prosecutors have investigated since the program was launched in March 2020.

At the time, Congress agreed to fund $ 349 billion in forgivable loans supported by the Small Business Administration to prevent hundreds of thousands of Americans from losing their businesses as the economy collapsed due to a wave of COVID-19 lockdowns. …

A month later, in April 2020, lawmakers pledged an additional $ 300 billion after large corporations closely associated with large banks first bought out most of the cash.

As of June, the U.S. Department of Justice has opened a criminal case at least 100 defendants in 70 different cases about alleged PPP loan fraud across the country.

The cases include one of the Virginia NASA executives who set up a fake business on behalf of his dementia mother-in-law. according to The Washington Post

Another case concerned a man who, while awaiting trial for filing fraudulent PPP loans, filed another: according to The New York Times

Benlevy’s alleged scheme may be one of the largest to date in dollar terms. Another indictment, released Thursday in Atlanta, includes 22 defendants. who allegedly fraudulently received $ 11.1 million in PPP funds

As of 4:00 pm Thursday, Benlevi has not yet been prosecuted. And it was not clear if he had a lawyer.

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