Somerset County Woman Admits Million Dollar Paycheck Protection Scheme and Economic Disaster Loan Fraud Scheme | USAO-NJ
NEWARK, NJ – A Somerset County, New Jersey woman today admitted to fraudulently obtaining more than $1 million in federal Paycheck Protection Program (PPP) loans and loans in case Disaster Disaster (EIDL), US Attorney Philip R. Sellinger said.
Nivah Garcis, 51, of North Plainfield, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan of federal court in Trenton to an information charging him with one count of conspiracy to commit bank fraud , three counts of wire fraud and one count. money laundering.
According to documents filed in this case and statements made in court:
Garcis conspired with at least one person to submit two fraudulent PPP loan applications to a lender on behalf of two alleged businesses she controlled, and additionally submitted three fraudulent EIDL loan applications to the U.S. Small Business Administration (SBA) on behalf of these companies and another company she owned. She then engaged in financial transactions with the loan proceeds, including the purchase of property.
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 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 applications Garcis submitted each contained fraudulent statements to the lender, a member of the Federal Home Loan Bank, and the SBA, including false federal tax documents allegedly from the IRS. Garcis also invented the existence of employees and salaries paid through the so-called companies. According to IRS records, however, none of the purported tax documents Garcis submitted in support of his loan applications were ever filed with the IRS. Based on Garcis’ misrepresentations, his loan applications for his purported businesses were approved for approximately $1.05 million in federal COVID-19 emergency relief funds earmarked for struggling small businesses. Garcis then used the proceeds to purchase property and for various personal expenses.
The count of conspiracy to commit bank fraud carries a maximum sentence of 30 years in prison and a fine of $1 million. The counts of wire fraud each carry a maximum sentence of 20 years in prison and a maximum fine of $250,000. The money laundering count faces a maximum sentence of 10 years in prison and a maximum fine of $250,000. Sentencing is scheduled for January 31, 2023.
U.S. Attorney Sellinger credited IRS Special Agents – Criminal Investigation, under Acting Special Agent in Charge Tammy L Tomlins; Special Agents of the Social Security Administration, Office of Inspector General, under Special Agent in Charge Sharon MacDermott; Special Agents of the United States Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; postal inspectors from the United States Postal Inspection Service in Newark, under Acting Inspector in Charge Raimundo Marrero, Philadelphia Division; Federal Housing Finance Agency Special Agents, Office of Inspector General, under Special Agent in Charge Robert Manchak; Special Agents of the Board of Governors of the Federal Reserve System’s Office of Consumer Financial Protection, Office of the Inspector General, under Acting Special Agent in Charge Stephen Donnelly; Federal Deposit Insurance Corporation Special Agents – Office of Inspector General, under Special Agent in Charge Patricia Tarasca in New York; and special agents from the Department of Homeland Security, Homeland Security Investigations, under Acting Special Agent in Charge Richard. W. Reinhold in Newark with the inquest leading to today’s guilty plea.
The government is represented by Assistant United States Attorneys Katherine M. Romano and David E. Dauenheimer of the Health Care Fraud Unit of the United States Attorney’s Office in Newark.
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.