FEDS: Southern District of Florida Takes Sweeping Action Against CARES Act Fraud

MIAMI, FL – On Friday, March 26, 2021, The United States Attorney for the Southern District of Florida, the Acting Assistant Attorney General of the United States Department of Justice’s Criminal Division, and representatives from their partner law enforcement agencies announced an update on their criminal enforcement efforts in South Florida to combat fraud under the CARES Act, the relief legislation that Congress passed one year ago to help individuals and businesses financially survive the COVID-19 pandemic. In particular, the enforcement efforts announced include prosecutions against defendants accused of trying to steal funds from the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program and the Unemployment Insurance (UI) benefit program.

The Southern District of Florida is a national leader in Covid-19 financial fraud prosecutions. In the last month, the district has charged the 18 federal criminal cases listed below alleging Covid-19/CARES Act-related financial fraud. Since passage of the CARES Act one year ago, the South Florida U.S. Attorney’s Office has charged a total of 38 COVID-19 financial fraud cases, with fraud scheme dollar amounts totaling over $75 million.

“When the CARES Act was first passed a year ago, our office promised South Floridians that we would prioritize the prosecution of fraudsters who tried to capitalize on this global health and economic crisis,” said Ariana Fajardo Orshan, the United States Attorney for the Southern District of Florida. “Our work has just begun, and we will continue to work together with our partners to hold accountable those who try to cheat South Floridians of much needed relief money.”

“To anyone thinking of using the global pandemic as an opportunity to scam and steal from hardworking Americans, my advice is simple – don’t,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “No matter where you are or who you are, we will find you and prosecute you to the fullest extent of the law.”

“The Cares Act was founded to provide financial assistance to millions of Americans and small businesses who are suffering the devastating economic effects caused by the COVID-19 pandemic. It is appalling to see that so many fraudsters orchestrated COVID-19 schemes of this magnitude. It is these indeterminate times where it is imperative for law enforcement partners to combat those who continue to enrich themselves by stealing from Americans in dire need of these funds”, said Acting Special Agent in Charge Tyler R. Hatcher, of IRS Criminal Investigation, Miami Field Office.

“Combatting fraud in the economic stimulus programs focused on providing aid to the nation’s small businesses requires a whole of government response,” said SBA OIG’s Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite.  “SBA OIG will aggressively pursue evidence of fraud with its law enforcement partners.  I want to thank the U.S. Attorney’s Office for its leadership and dedication to pursuing justice.”

“Our investigations quickly identified individuals willing to capitalize on this national emergency to enrich themselves at the expense of struggling businesses and their employees,” said George L. Piro, Special Agent in Charge, FBI, Miami Field Office. “Today does not represent the end of our efforts in this fight. The FBI will continue to pursue those who defraud the government until they are all prosecuted.”

“The egregious act of stealing from the U.S. government hurts the well-deserving American workers and families that truly deserve the financial assistance provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act,” said Juan A. Vargas, Acting Inspector in Charge, U.S. Postal Inspection Service, Miami Division. “Together with our federal, state, and local partners we will continue to investigate these types of crimes and seek justice for all Americans trying to make it through this pandemic.  We stand together with Americans and strive to obtain justice for all.”

“An important mission of the U.S. Department of Labor Office of Inspector General is to investigate allegations of fraud relating to the unemployment insurance program. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated Rafiq Ahmad, Special Agent-in-Charge, Atlanta Region, U.S. Department of Labor, Office of Inspector General.

“Taking advantage of a program designated to assist businesses in the midst of a pandemic is truly reprehensible,” said Special Agent in Charge Zinnia James of the Coast Guard Investigative Service, Southeast Region. “CGIS and our law enforcement partners will continue to aggressively pursue all manner of fraud within the maritime community.”

“Today’s announcement is the culmination of hard work by numerous agencies. It sends a clear message – federal law enforcement is watching, and will relentlessly pursue fraudsters and bring them to justice,” said Wayne Rosen, Assistant Special Agent in Charge, Miami Regional Office, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection. “We are proud to work with our law enforcement partners in this endeavor.”

Other law enforcement agency partners involved in recent prosecutions of alleged Covid-19 relief financial fraud are United States Secret Service and Federal Deposit Insurance Corporation, Office of Inspector General.

On March 27, 2020, Congress passed a $2.2 trillion economic relief bill known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. Anticipating the need to protect the integrity of these taxpayer funds and to otherwise protect South Floridians from financial fraud related to the COVID-19 pandemic, the Southern District of Florida immediately established multiple efforts dedicated to identifying, investigating, and prosecuting such fraud.  The multifaceted approach to enforcement during this national health emergency continues.

Criminal enforcement in the Southern District of Florida to combat COVID-19/CARES Act- related financial fraud schemes have proceeded on numerous fronts, including:

• Paycheck Protection Program (PPP) fraud:  Prominent among the District’s efforts have been cases involving attempts to obtain PPP loans through fraud. These loans were intended to help small businesses financially survive the COVID-19 pandemic. The cases charged in the District involve a range of conduct, from individual business owners who have inflated their payroll expenses to obtain larger loans than they otherwise would have qualified for, to serial fraudsters who revived dormant corporations and purchased shell companies with no actual operations to apply for multiple loans falsely stating they had significant payroll, to organized criminal networks submitting identical loan applications and supporting documents under the names of different companies.

• Economic Injury Disaster Loans (EIDL) fraud: Another type of fraud charged in the District has been fraud against the EIDL program, which was designed to provide loans to small businesses, agricultural, and non-profit entities. Fraudsters have targeted the program by applying for EIDL advances and loans on behalf of ineligible newly-created, shell, or non-existent businesses, and diverting the funds for illegal purposes.

• Unemployment Insurance (UI) fraud: Due to the COVID-19 pandemic, more than $860 billion in federal funds has been appropriated for UI benefits through September 2021. People looking to exploit UI benefits during the pandemic use stolen identities to fraudulently file for UI benefits.

The following Covid-19 relief fraud cases were charged in the Southern District of Florida in the last 30 days:  

United States v. Cleare, Case No. 21-mj-02515 – Kimberly Cleare, 53, of Miami Gardens, Florida, was charged by criminal complaint with wire fraud.  The complaint alleges that the defendant was involved in the submission of at least 13 fraudulent EIDL applications to the U.S. Small Business Administration on behalf of herself and other individuals. The complaint further alleges that Cleare provided substantially similar data on all the applications that she submitted, even though the applications were being submitted on behalf of different business entities. USPIS Miami investigated the case. Assistant U.S. Attorney Lauren Astigarraga is prosecuting it.   

United States v. Thames, Case No. 21-mj-06101 – Devonte Thames, 28, of Hollywood, South Carolina, was charged by criminal complaint with wire fraud, bank fraud, and conspiracy and attempt to commit wire fraud and bank fraud. The criminal complaint against Thames alleges that Thames participated in a conspiracy to submit at least $34 million worth of fraudulent PPP loan applications. Specifically, the criminal complaint alleges that Thames received a fraudulent PPP loan of $409,735 for his own company, the Berneta E. Thames Foundation LLC. The criminal complaint also alleges that Thames conspired to submit additional fraudulent PPP loan applications for other companies by recruiting others to submit such applications in exchange for kickbacks. IRS-CI Miami and FBI Miami investigated the case. Assistant U.S. Attorney Kiran N. Bhat and DOJ Trial Attorney Philip B. Trout are prosecuting it.

United States v. Rosado, Case No. 21-mj-6145 – Jericca Rosado, 27, of Buford, Georgia, was charged by criminal complaint with wire fraud, bank fraud, and conspiracy and attempt to commit wire fraud and bank fraud. The criminal complaint alleges that Rosado participated in a conspiracy to submit at least $34 million worth of fraudulent PPP loan applications. Specifically, the criminal complaint alleges that Rosado received a $50,000 kickback payment in connection with a fraudulent PPP loan of $454,272, of which she passed $25,000 to a co-conspirator, as well as a second kickback payment in connection with a fraudulent PPP loan obtained by Devonte Thames, 28, of Hollywood, South Carolina, charged by separate criminal complaint. The criminal complaint against Rosado also alleges that Rosado conspired with Thames and others to receive additional kickback payments from fraudulently obtained PPP loan proceeds, and directed kickback payments from fraudulently obtained PPP loan proceeds to other co-conspirators and their businesses. IRS-CI Miami and FBI Miami investigated the case. Assistant U.S. Attorney Kiran N. Bhat and DOJ Trial Attorney Philip B. Trout are prosecuting it. 

United States v. Kralievits, Case No. 21-cr-20157 – Ioannis Kralievits, 30, of Miami, Florida, was charged in an information with conspiracy to commit an offense against the United States in violation of Title 18, United States Code, Section 371, relating to the alleged fraudulent receipt of a PPP loan of approximately $767,000. FDIC-OIG and IRS-CI Miami investigated the case. Assistant U.S. Attorney Michael N. Berger and DOJ Trial Attorney Emily Scruggs are prosecuting it. 

United States v. Etwaru, Case No. 21-cr-20156 – Justin Etwaru, 25 of Boca Raton, Florida, was charged in an information with conspiracy to commit an offense against the United States in violation of Title 18, United States Code, Section 371, relating to the alleged fraudulent receipt of a PPP loan of approximately $57,000.  FDIC-OIG and IRS-CI Miami investigated the case. Assistant U.S. Attorney Michael N. Berger and DOJ Trial Attorney Emily Scruggs are prosecuting it. 

United States v. Rivero, Case No. 21-cr-20160 – Leonel Rivero, 35, of Miami, Florida was charged by information for his alleged participation in a scheme to obtain fraudulent PPP loans based on falsified income and expense information and tax documentation. According to the allegations in the information, Rivero owned a tax-preparation business in Hialeah Gardens and submitted approximately 118 fraudulent PPP loan applications on behalf of himself and his accomplices. Combined, the 118 PPP loan applications sought more than $2.3 million in PPP loans. On each PPP loan application, Rivero allegedly falsified the applicant’s prior-year income and expenses and submitted fraudulent IRS tax forms. Rivero and his accomplices allegedly received approximately $975,582 in PPP loans as a result of the fraud.  IRS-CI Miami and SBA-OIG investigated this case.  Assistant U.S. Attorney Christopher Browne and DOJ Trial Attorney Della Sentilles are prosecuting it. Assistant U.S. Attorney Nicole Grosnoff is handling asset-forfeiture.

United States v. Thompkins, Case No. 21-cr-20136 – Kenbrell Armod Thompkins, 32, of Miami, Florida, a former National Football League (NFL) player, was charged by federal indictment with access device fraud and aggravated identity theft. It is alleged in court documents that Thompkins used the stolen identities of numerous Florida residents to obtain fraudulent unemployment insurance benefits from the State of California. California distributed these unemployment benefit funds in the form of debit cards, which were subsequently mailed to addresses associated with Thompkins in Miami and Aventura, Florida. Court documents allege that from August 16 through September 23, 2020, Thompkins used these debit cards to withdraw funds at various ATMs in Miami-Dade County. The alleged scheme involves approximately $300,000 in California unemployment insurance funds credited to the fraudulent debit cards associated with Thompkins, out of which approximately $230,000 of the funds were withdrawn. U.S. Secret Service, DOL-OIG, and City of Aventura Police Department investigated the case. Assistant U.S. Attorney Eduardo Gardea, Jr., is prosecuting it. 

United States v. Travis, Case No. 21-mj-6173 – Johnesha Travis, 21 of Fort Lauderdale, Florida and his alleged co-conspirator were charged by federal criminal complaint in the Southern District of Florida with conspiracy to commit wire fraud and bank fraud, wire fraud, and bank fraud.  They are alleged to have obtained a PPP loan of $152,605 for their company, Luxury Yacht Rentals Plus, LLC, using falsified documents.  The complaint also alleges that Luxury Yacht Rentals Plus LLC did not have real employees and that they used the loan funds on personal items such as restaurants and hotels.  Coast Guard Investigative Service investigated the case. Assistant U.S. Attorney Bertila Fernandez is prosecuting it.

United States v. Garcia, Case No. 21-mj-6150 – Dennes Garcia, 27, of Atlanta, Georgia was charged in a federal criminal complaint with wire fraud, bank fraud, and conspiracy and attempt to commit wire fraud and bank fraud. The criminal complaint against Garcia alleges that Garcia obtained a PPP loan of $285,742 for his company, Dhanda Corporation, using falsified documents.  It is alleged that Garcia failed to use the PPP loan on business-related or payroll-related expenses and instead made substantial payments to himself and others. According to the complaint, Garcia participated in a conspiracy to submit at least $34 million worth of fraudulent PPP loan applications. Many of those loan applications were approved and funded by financial institutions, paying out at least $17.6 million.  IRS-CI Miami and FBI Miami investigated the case.  Assistant U.S. Attorney Lindsey Friedman is prosecuting it.  

United States v. Denton, Case No. 21-mj-6149 – Cindi Ellis Denton, 62, of Eastvale, California was charged in a federal criminal complaint with wire fraud, bank fraud, and conspiracy and attempt to commit wire fraud and bank fraud. The criminal complaint against Denton alleges that Denton obtained a PPP loan of $491,310 for her company Emerald Jade Business Solutions, using falsified documents.  It is alleged that Denton failed to use the PPP loan on business-related or payroll-related expenses and instead made substantial payments to herself and others. According to the complaint, Denton conspired with others to obtain millions of dollars in fraudulent PPP loans. According to the complaint, Denton participated in a conspiracy to submit at least $34 million worth of fraudulent PPP loan applications. Many of those loan applications were approved and funded by financial institutions, paying out at least $17.6 million.  IRS-CI Miami and FBI Miami investigated the case.  Assistant U.S. Attorney Lindsey Friedman is prosecuting it.  

United States v. Dorlus, Marc, and Geronimo, Case No. 21-mj-06175 – Wally Dorlus, 41, of Margate, Florida, Marcgenson Marc, 37, of Coconut Creek, Florida, and Roberto Geronimo, 40, of Miami Gardens, Florida, were charged by criminal complaint for their alleged participation in a scheme and conspiracy to obtain fraudulent PPP loans based on falsified employee and payroll obligations and documentation. According to the complaint, Dorlus was a tax preparer who, in exchange for kickbacks, facilitated the filing of over 167 fraudulent PPP loan applications, which included falsified supporting payroll tax documentation, seeking over $28 million in PPP loan funds on behalf of companies under his control and over 100 other companies. Of those, approximately 33 PPP loans were funded in the approximate amount of $5.5 million.  It is alleged that Dorlus collected kickbacks ranging from 12.5% to 25% of the PPP loan proceeds and that Marc was a recruiter for Dorlus who shared in the kickbacks, which were paid to entities under the control of Dorlus and Marc or in cash. Marc, in turn, recruited at least one other individual to apply for fraudulent PPP loans through Dorlus and recruited additional applicants in exchange for a credit on the kickback he owed, says the complaint. Geronimo, who was on bond pending trial on federal drug conspiracy charges in Case No. 20-cr-20066, allegedly received a fraudulent PPP loan for approximately $250,000 based on falsified payroll tax documentation submitted by Dorlus. Geronimo paid 25% of the fraudulent PPP loan proceeds as a kickback, which was shared between Dorlus and Marc, and spent the remainder on personal expenditures, according to the allegations. As an individual subject to federal indictment, Geronimo was prohibited from applying for a PPP loan on behalf of any entities under his control. It is alleged that after receiving his own fraudulent PPP loan, Geromino attempted to recruit additional applicants for a share of the kickbacks. IRS-CI Miami investigated the case.  Assistant U.S. Attorney Stephanie Hauser is prosecuting it.

United States v. Saintfumin and Adras, Case No. 21-mj-02529 – Oldley Saintfumin, 40, and Lucie Adras, 38, of North Miami Beach, Florida, were charged by criminal complaint for their alleged unauthorized use of debit cards issued in other individuals’ names by various state employment offices that distribute unemployment insurance benefits. From in or around May 2020, through September 2020, various states reported that dozens of unemployment insurance benefit claims had been submitted or accessed from an Internet Protocol address associated with the defendants’ residence. During execution of a search warrant at the residence, law enforcement seized at least 15 debit cards issued by the various states’ employment offices in the names of individuals other than Saintfumin and Adras. Both Saintfumin and Adras were allegedly captured on ATM surveillance video withdrawing funds from accounts associated with unemployment insurance benefits issued in other individuals’ names. DOL-OIG investigated this case. Assistant U.S. Attorney Stephanie Hauser is prosecuting the case. Assistant U.S. Attorney Mitchell Hymen is handling asset forfeiture.

United States v. James Medard, a/k/a “James Menard,” a/k/a “James Joseph,” Case No. 21-mj-02514 – James Medard, 47, of Miramar, Florida was charged with wire fraud, money laundering, and aggravated identity theft in a criminal complaint that alleges that he applied for fraudulent loans under the CARES Act.  According to the complaint, the defendant, who is on federal supervised release in Case No. 14-cr-20469, obtained two EIDL loans, one under the name of a business he controlled, and a second one in his name, and submitted false earnings information, a falsified IRS form, as well as false personal identifying information to conceal his true identity and obtain approval for the loans. The complaint also alleges that the defendant applied for a fraudulent PPP loan,  for which he submitted falsified IRS forms, and lists of purported employees containing the means of identification of real people who did not work for the defendant or his business, and did not authorize the defendant or his business to use their means of identification to support a PPP loan application.   The defendant used some of the fraud proceeds to purchase a parcel of real property, according to the complaint. IRS-CI Miami investigated this case.  Assistant U.S. Attorney Aimee C. Jimenez is prosecuting it.  

United States v. Blanco, Case No. 21-mj-08094 – Yansel Jimenez Blanco, 30, of Greenacres, Florida, and the owner of a trucking company, was charged by criminal complaint with one count of wire fraud, one count of bank fraud, and one count of money laundering.  The complaint alleges that the defendant applied for and received a $487,500 PPP loan to pay business expenses for his trucking company, such as employee payroll. The defendant then used the funds to pay for personal expenses, or transferred the funds to multiple individuals who were not employees, according to the complaint. FBI Miami investigated the case. Assistant U.S. Attorney Susan Osborne is prosecuting it.

United States v. Wolf, Case No. 21-mj-08099 – Barry Wolf, 57, of Boca Raton, Florida, was charged with wire fraud. The criminal complaint alleges that defendant received over $500,000, primarily from two fraudulent PPP loans.  The defendant also submitted five fraudulent EIDL applications, according to the complaint. FBI Miami investigated the case. Assistant U.S. Attorney Eli S. Rubin is prosecuting the case.  

United States v. Herrera, Case No. 21-mj-02532 – Yamil Herrera, 49, of Miami, Florida, was charged with wire fraud, in a criminal complaint that alleges that defendant received over $300,000 from two fraudulent EIDL loans and advances.  FBI Miami investigated the case. Assistant U.S. Attorney Eli S. Rubin is prosecuting it.  

United States v. Duhart, Case No. 21-mj-06153 – Shanrika Shantae Duhart, 35, of Miramar, Florida was charged in a federal criminal complaint with wire fraud, bank fraud, and conspiracy and attempt to commit wire fraud and bank fraud. The criminal complaint against Duhart alleges that Duhart obtained a PPP loan of $388,790 for her company Hair She Goes, Inc., using falsified documents. It is alleged that Duhart failed to use the PPP loan on business-related or payroll-related expenses and instead made substantial payments to herself and to others, withdrew large amounts in cash, transferred money to other entities, and used money to pay for her personal expenses.  According to the complaint, Duhart participated in a conspiracy to submit at least $34 million worth of fraudulent PPP loan applications. Many of those loan applications were approved and funded by financial institutions, paying out at least $17.6 million.  IRS-CI and FBI Miami investigated the case.  Assistant U.S. Attorney Yisel Valdes and DOJ Trial Attorney Philip B. Trout are prosecuting it. 

United States v. Bain, Case No. 21-mj-06152 – Yashica Sherea Bain, 38, of Miramar, Florida was charged in a federal criminal complaint with wire fraud, bank fraud, and conspiracy and attempt to commit wire fraud and bank fraud.  The criminal complaint against Bain alleges that Bain obtained a PPP loan of $415,232 for her company Microblading Brow Studio, LLC, using falsified documents. It is alleged that Bain failed to use the PPP loan on business-related or payroll-related expenses and, instead, made substantial payments to herself and others, withdrew large amounts in cash, and used money towards the purchase of a bar and lounge in Miami, Florida. According to the complaint, Bain conspired with others to obtain millions of dollars in fraudulent PPP loans. According to the complaint, Bain participated in a conspiracy to submit at least $34 million worth of fraudulent PPP loan applications. Many of those loan applications were approved and funded by financial institutions, paying out at least $17.6 million. IRS-CI and FBI Miami investigated the case. Assistant U.S. Attorney Yisel Valdes and DOJ Trial Attorney Philip B. Trout are prosecuting it.  

To learn more about the Southern District of Florida’s COVID response, visit: https://www.justice.gov/usao-sdfl.

To report a COVID-19-related fraud scheme or suspicious activity, contact the National Center for Disaster Fraud (NCDF) by calling the NCDF Hotline at 1-866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Indictments, criminal complaints, and other criminal charges referenced above are merely allegations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.