A Middlesex County man was sentenced today to 30 months in prison for fraudulently receiving Payment Protection Program (PPP) funds and depositing a stolen and altered U.S. Treasury check, Acting U.S. Attorney Rachael A. Honig announced today.
According to Acting U.S. Attorney Honig, Bernard Lopez, 40, previously pleaded guilty to an information charging him with bank fraud and theft of government funds.
According to the documents filed in this case and statements made in court:
Lopez devised a scheme to commit bank fraud through which a stolen and altered U.S. Treasury check was deposited into a corporate bank account Lopez created in the name of Pezlo Management LLC.
The check was altered to be made payable to Pezlo for $211,886 and was then deposited into Pezlo’s corporate bank account.
Lopez later withdrew or transferred the stolen proceeds from Pezlo’s bank account before the bank could detect the fraud.
On June 24, 2020, Lopez caused to be submitted a fraudulent PPP loan application to a lender on behalf of Company-1, a purported business 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 apply directly to banks or financial institutions participating in the program; in those applications, applicants make affirmative certifications about their average monthly payroll expenses and the number of employees.
Applicants also certify their intent to spend PPP proceeds on permissible business expenses, such as payroll costs, rent, utilities, and interest on mortgages.
PPP loans may be entirely forgiven if the recipient spends the loan proceeds on these permissible expenses within a designated period 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/lease and utilities expenses.
Company-1 did not, in fact, employ any employees, nor did it incur payroll or utility expenses.
Based on Lopez’s misrepresentations, the lender approved Lopez’s PPP loan application and provided Lopez’s purported business with $481,502 in federal COVID-19 emergency relief funds meant for distressed small businesses. Lopez then converted a portion of the proceeds for his own use.
In addition to the prison term, Lopez was sentenced to three years of supervised release and ordered restitution of $137,000 and forfeiture of $481,502.