United States v. Joao Mendes

Case summary

Joao Mendes, 60, a Brockton man, was sentenced by U.S. District Judge Nathaniel M. Gorton to 27 months in prison, followed by one year of supervised release, and ordered to pay restitution of $1,542,759 and to forfeit assets totaling $1,751,694.¹ He had been charged on July 21, 2022, in connection with a scheme to submit false applications for Paycheck Protection Program and Economic Injury Disaster Loan Program funds through the Small Business Administration. Mendes, then 59, had agreed to plead guilty to one count of wire fraud.²

Beginning around June 2020 and continuing until at least September 2020, Mendes submitted fraudulent PPP and EIDL applications on behalf of several companies, many of which were defunct. The fraudulent PPP applications misrepresented the number of employees and average monthly payroll expenses of his businesses; he also submitted false tax records in support, and misrepresented employee counts, gross revenues and costs of goods sold in his EIDL applications. Mendes submitted multiple applications for a single entity to successive lenders, containing conflicting information, until a loan was ultimately approved. Based on the fraudulent applications, Mendes and two of his relatives received more than $1.5 million in PPP and EIDL funds.¹ He spent the funds for his own benefit, including purchasing cryptocurrency, or transferred them to other accounts he controlled or to other individuals.³

Mendes pleaded guilty to one count of wire fraud in December 2023, before U.S. District Judge Nathaniel M. Gorton, who scheduled sentencing for April 9, 2024. The government seized cryptocurrency and fiat currency from more than 20 accounts, recovering $1.545 million in cryptocurrency and more than $206,000 in U.S. currency for forfeiture.³

The sentence was announced by the U.S. Attorney's Office and the Justice Department's Criminal Division. Announcing with them were the FBI's Los Angeles Field Office, the SBA Office of Inspector General's Western Region, the FDIC Office of Inspector General's New York Regional Office, and IRS Criminal Investigation's Los Angeles Field Office. Also announcing were the U.S. Postal Inspection Service, the Federal Housing Finance Agency Office of Inspector General, the Treasury Inspector General for Tax Administration, and the Office of Inspector General for the Federal Reserve Board and Consumer Financial Protection Bureau. Assistant U.S. Attorneys Mackenzie A. Queenin and Carol E. Head and Trial Attorney Jennifer Bilinkas of the Justice Department's Criminal Division Fraud Section prosecuted the case.¹

Notes

1. U.S. Attorney's Office for the District of Massachusetts, "Brockton Man Sentenced for Fraudulently Obtaining More Than $1.5 Million in COVID-Relief Funds" (original), April 10, 2024. ↩₁ ↩₂ ↩₃
2. U.S. Attorney's Office for the District of Massachusetts, "Brockton Man Charged with Fraudulently Obtaining Over $1.5 Million in COVID-Relief Funds" (original), July 25, 2022. ↩
3. U.S. Attorney's Office for the District of Massachusetts, "Brockton Man Pleads Guilty to Fraudulently Obtaining More Than $1.5 Million in COVID-Relief Funds" (original), December 19, 2023. ↩₁ ↩₂

Summary written from the documents on this page; every sentence is sourced.