Nevada Man Faces Criminal Charges in $1.6 Million COVID-19 Relief Fraud Case
A 37-year-old Nevada man has been indicted on federal charges for allegedly obtaining approximately $1.6 million from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. Bryan Robinson of Henderson, Nevada, was arraigned on December 18, 2020 and faces two counts of wire fraud and one count of engaging in transactions in unlawful proceeds. The federal charges were announced by U.S. Attorney Nicholas A. Trutanich of the District of Nevada, Special Agent in Charge Tara Sullivan of the Internal Revenue Service-Criminal Investigation (IRS-CI), Special Agent in Charge Aaron C. Rouse of the FBI’s Las Vegas Field Office, and Special Agent in Charge Weston King of the Small Business Administration’s Office of the Inspector General (SBA-OIG) in a December 21 news release from the U.S. Attorney’s Office for the District of Nevada.
PPP and EDIL Funds for Small Businesses
The SBA guarantees Paycheck Protection Program loans for qualifying small businesses experiencing financial disruption as a result of the coronavirus pandemic under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The emergency PPP funds are meant to provide eligible businesses with a direct incentive to keep their workforce employed during COVID-19 and pay for certain other expenses, such as interest on mortgages, rent and utilities. The CARES Act, signed into law in March 2020, authorized up to $349 billion in loans for small businesses, and another $300 billion was authorized by Congress in April 2020. The PPP loans are 100% forgivable so long as the loan proceeds are used for payroll costs and eligible business expenses within a set time period and at least a certain percentage of the loan is put towards payroll expenses.
The CARES Act also authorized the SBA to provide up to $2 million in EIDL funds to eligible small businesses experiencing a temporary loss of revenue during COVID-19. Loans distributed under the EIDL program can be used to cover a variety of working capital and business operating expenses, such as rent, utilities, continuation of healthcare benefits and fixed debt payments. While businesses are permitted to obtain loans under both the PPP and the EIDL, the funds cannot be used for the same purpose.
Details About the COVID-19 Relief Fraud Case
According to allegations raised in the federal indictment, Robinson submitted fraudulent applications seeking COVID-19 relief funds from both the EIDL program and the Paycheck Protection Program. The applications were submitted in the name of ATeam LLC for approximately $1.5 million in PPP loan funds and $150,000 in EIDL funds. The loan applications claimed that ATeam employed 37 workers and had significant revenue and payroll expenses. The indictment alleges, however, that ATeam is a dance company with no payroll expenses. The indictment also alleges that Robinson used the loan proceeds distributed to ATeam for personal expenses and transfers to other businesses, rather than for payroll and eligible business expenses.
Businesses applying for coronavirus relief money are required to make certain certifications regarding their need for the emergency funds due to “current economic uncertainty,” and other matters. In his applications, Robinson certified that he had not been convicted of a felony offense within the previous five years. However, prosecutors say that he pleaded guilty to a felony drug possession charge in Wyoming in 2018 and was serving three years’ probation when he submitted the applications for the PPP and EIDL funds.
Robinson was initially charged with COVID-19 relief fraud in August, after it was discovered that he allegedly submitted false and fraudulent applications to obtain loans through the PPP and the EIDL program. The federal complaint, dated August 27, 2020, states the following:
“On or about June 11, 2020, in the State and Federal District of Nevada, and elsewhere, [the defendant] did knowingly, willfully, and with the intent to defraud, having devised and intending to devise a scheme and artifice to defraud, and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, knowing such pretenses, representations, and promises were false and fraudulent when made, transmit and cause to be transmitted, by means of wire communications in interstate commerce, writings, signals, pictures, and sounds, for the purpose of executing such scheme and artifice, to wit: an interstate wire transfer in the amount of $1,502,270 from Bank 2 outside the State of Nevada to an account controlled by Robinson at Bank 1 in the State of Nevada.”
Penalties for Wire Fraud, Engaging in Transactions in Unlawful Proceeds
Robinson was indicted on December 9 on federal charges for wire fraud and engaging in transactions in unlawful proceeds and pleaded not guilty on December 18 in U.S. District Court in Las Vegas. Wire fraud, a violation of 18 U.S.C. § 1343, is a felony offense under federal law. In most cases, the maximum penalty for a conviction of wire fraud is 20 years in federal prison. However, in cases where the victim of the wire fraud was a financial institution, the penalty can be increased to 30 years in federal prison, plus up to $1 million in fines. Engaging in transactions in unlawful proceeds is a violation of 18 U.S. Code § 1957, a companion charge to money laundering (18 U.S. Code § 1956). The maximum penalty for a conviction of engaging in transactions in unlawful proceeds is imprisonment in federal prison for 10 years, plus a fine.
The federal government is making great efforts to crack down on fraudulent activity involving the PPP and other federal COVID-19 relief programs. Robinson’s fraud case was investigated by the FBI, in coordination with the IRS-CI and the SBA-OIG. Prosecuting the case are Trial Attorney Joseph McFarlane of the Department of Justice’s Criminal Division’s Fraud Section and Assistant U.S. Attorney Jessica Oliva of the U.S. Attorney’s Office for the District of Nevada. It is important to note that a federal indictment is merely an accusation, not a statement of fact. Just like in any criminal case, defendants in federal cases are presumed innocent unless or until proven guilty beyond a reasonable doubt in a court of law.