Middlesex County man admits $1.6m paycheck protection scheme and economic disaster loan fraud scheme | USAO-NJ


NEWARK, NJ – A Middlesex County, New Jersey man today admitted his role in a scheme to defraud lenders and the Small Business Administration (SBA) by fraudulently obtaining approximately $1.6 million in federal Paycheck Protection Program (PPP) and economic disaster loans. (EIDL), US Attorney Philip R. Sellinger said.

Jordan C. Larkins, 32, of Edison New Jersey, pleaded guilty before U.S. District Judge Zahid N. Qurashi by videoconference to a briefing charging him with one count of wire fraud, one count of bank fraud and one count of money laundering.

According to documents filed in this case and statements made in court:

From May 2020 to July 2020, Larkins submitted three fraudulent PPP loan applications to three different lenders and 11 EIDL applications to the SBA on behalf of numerous purported businesses.

The CARES Act (Coronavirus Aid, Relief, and Economic Security) is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to millions of Americans who are suffering from 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 small business forgivable loans for job retention and certain other expenses, through the PPP. . In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows small businesses and other eligible organizations to receive loans with a term of two years and an interest rate of 1%. PPP loan proceeds are to be used by businesses for payroll costs, mortgage interest, rent and utilities. PPP allows for the interest and principal of the PPP loan to be forgiven if the business spends the loan proceeds on these expenses within a specified time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on the expenses. wages. . The EIDL program was an SBA program that provided low-interest financing to small businesses, tenants, and homeowners in regions affected by declared disasters. The CARES Act authorized the SBA to provide EIDLs of up to $2 million to eligible small businesses that were experiencing significant financial disruption due to the COVID-19 pandemic.

Of his 14 fraudulent PPP and EIDL applications, Larkins made false statements to participating lenders and the SBA, including false federal tax filing documents for his alleged businesses and false bank statements. He also fabricated the identities of certain people listed as candidates and the corresponding driver’s licenses of those alleged candidates.

Based on Larkins’ misrepresentations, he secured approximately $1.6 million in PPP and EIDL funds. Larkins then misused the funds by making a series of cash withdrawals, transferring funds to foreign banks, and for various other personal expenses.

The bank fraud charge carries a maximum sentence of 30 years in prison and a $1 million fine; the charge of wire fraud carries a maximum sentence of 20 years in prison and a fine of $250,000; the money laundering charge carries a maximum penalty of 10 years in prison and a fine of $250,000, or double the gross gain to the defendant or the gross loss to the victim, depending on the higher. Judgment is scheduled for July 21, 2022.

US Attorney Sellinger credited inspectors from the United States Postal Inspection Service, Newark Division, under Inspector in Charge Damon Wood; IRS Special Agents – Criminal Investigation, under Special Agent in Charge Michael Montanez; and special agents from the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge Sharon MacDermott, the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the Government Fraud Unit at the U.S. Attorney’s Office in Newark.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to mobilize Department of Justice resources in partnership with government agencies to scale up enforcement and prevention efforts. pandemic-related fraud. The task force strengthens efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies administering relief programs to prevent fraud, among other methods, by increasing and integrating coordination mechanisms existing ones, identifying resources and techniques to uncover fraudulent actors and their agendas, and sharing and leveraging information and knowledge gained from previous enforcement efforts. For more information about the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about alleged attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Disaster Fraud Center hotline at 866-720 -5721 or through the NCDF’s online complaint form at: https://www.justice. gov/disaster-fraud/ncdf-disaster-complaint-form.

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