California couple charged with defrauding Paycheck Protection Program | USAO-HI

HONOLULU — A federal grand jury today returned a four-count indictment against Christopher A. Mazzei, 44, and Erin V. Mazzei, 41, of Arroyo Grande, Calif. The indictment charges the defendants with wire fraud, money laundering and conspiracy in connection with a scheme to defraud the government of forgivable Paycheck Protection Program (PPP) loan funds intended for aid related to COVID-19.

The indictment alleges that husband and wife Christopher and Erin Mazzei submitted requests for PPP funds to a Hawaiian financial institution and two other financial institutions on behalf of three alleged businesses, each time using interstate cables. For each request, the Mazzeis allegedly created false Internal Revenue Service (IRS) tax returns and payroll records, which they presented as genuine and submitted to the banks to support their requests for PPP loan funds. According to the indictment, as a result of the false and fraudulent claims, the Mazzeis received $1,365,000 in PPP loan funds, which they then used for personal purposes, such as purchasing several utility vehicles. sports and a home in Kapolei, Hawaii, among other places. things.

The CARES Act 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 full forgiveness of PPP loan interest and principal if the company 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 payroll expenses.

“Our entire community suffers when federal funds earmarked for critical pandemic relief are unlawfully diverted for personal gain,” said U.S. Attorney Clare E. Connors. “We will prosecute and prosecute those who defraud programs that provide a financial lifeline to struggling small businesses in Hawaii and across the United States during the COVID-19 pandemic.”

“As the country continues to grapple with the effects of the COVID-19 pandemic, these indictments are an unfortunate reminder that there are always those who will stoop to enrich themselves unjustly, even at the expense of those who suffer around of them,” the special agent said. in charge Bret Kressin, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “Financial fraud against government assistance programs is not without victims, as it directly steals resources from those who really need them. Today’s legal actions mean that IRS:CI will continue to protect our communities by investigating those who choose to commit these crimes.

“The allegations described in this indictment represent a significant abuse of the Paycheck Protection Program that was created to help small businesses that were suffering economic hardship caused by the pandemic,” said Special Agent in Charge Jeffrey D. Pittano of the Federal Deposit Insurance Corporation. Office of Inspector General (FDIC OIG). “The FDIC OIG will continue to work with our law enforcement partners in the District of Hawaii and across the country, to investigate those who seek to take advantage of Federal relief programs and threaten to undermine the integrity of our nation’s financial institutions.

“Today’s indictment sends a clear message that those who exploit and defraud financial institutions and government pandemic relief funds will be brought to justice,” said Special Agent Cory Nootnagel. Acting Western Region, Office of the Inspector General of the Board of Governors. the Federal Reserve System and the Consumer Financial Protection Bureau.

A federal indictment is just a charge. A defendant is presumed innocent until proven guilty beyond a reasonable doubt by a court.

The investigation was conducted jointly by the IRS Criminal Investigation, the FDIC’s Office of Inspector General, and the Office of Inspector General of the Federal Reserve Board of Governors, with assistance from the Office of the Inspector General of the Small Business Administration and Inspector of the US Treasury. General of the tax administration. Assistant U.S. Attorney Gregg Paris Yates is handling the prosecution.

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 Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via NCDF’s online complaint form at: https://www. .justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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