Middlesex Man Sentenced to 30 Months in Jail for Paycheck Protection Program Fraud and Obtaining Funds from Stolen and Altered US Treasury Checks | USAO-NJ
TRENTON, NJ – A man in Middlesex County, New Jersey was sentenced today to 30 months in jail for fraudulently receiving Payment Protection Program (PPP) funds and depositing a stolen US Treasury check and tampered with, Acting Prosecutor Rachael A. Honig announced today.
Bernard Lopez, 40, had already pleaded guilty by video conference before US District Judge Peter G. Sheridan to information accusing him of one count each of bank fraud and theft of public funds. Justice Sheridan delivered the sentence today by video conference.
According to the documents filed in this case and the statements made in court:
Lopez devised a scheme to commit bank fraud whereby a stolen and altered US Treasury check was deposited into a Lopez corporate bank account established in the name of Pezlo Management LLC. The check was amended to be made payable to Pezlo in the amount of $ 211,886 and was then deposited into Pezlo’s business bank account. Lopez then removed or transferred the stolen product from Pezlo’s bank account before the bank could detect the fraud.
On June 24, 2020, Lopez had a fraudulent PPP loan application submitted to a lender on behalf of Company-1, an alleged company that Lopez controlled. The Small Business Administration oversees the PPP, which is designed to provide forgivable loans to small businesses affected by the coronavirus pandemic. Applicants for PPP loans go directly to banks or financial institutions participating in the program; In these applications, applicants make affirmative certifications on their average monthly salary expenses and number of employees. Applicants also certify their intention to spend the proceeds of the PPP on permitted business expenses, such as labor costs, rent, utilities, and mortgage interest. PPP loans can be fully canceled if the recipient spends the loan proceeds for those authorized expenses within a specified time after receiving the proceeds.
Lopez’s PPP application falsely represented that Company 1 employed 25 employees, had a monthly payroll expense of approximately $ 192,000, and had mortgage / rental and utility expenses. In fact, Company-1 did not employ any employees, nor did it incur any payroll or utility expenses. Based on Lopez’s false claims, the lender approved Lopez’s PPP loan application and provided Lopez’s alleged business with $ 481,502 in federal COVID-19 emergency relief funds for struggling small businesses. Lopez then converted some of the proceeds for his own use.
In addition to jail time, Judge Sheridan sentenced Lopez to three years on probation and ordered the restitution of $ 137,000 and forfeiture of $ 481,502.
Acting U.S. Attorney Honig assigned the Special Agents and U.S. Department of Treasury-OIG Task Force agents, under the direction of Assistant Inspector General for Investigations, Sally D. Luttrell, to the investigation that led to the accusations. She also thanked the special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of the special agent in charge Jason J. Molina in Newark, and the special agents of the Federal Deposit Insurance Corporation Office of Inspector General, under the direction of management of Special Agent responsible Patricia Tarasca for assistance.
The government is represented by Assistant US Attorney Perry Farhat of the Government Fraud Unit of the Criminal Division of the US Attorney’s Office in Newark.