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Rafael Martinez

Executive

PPP · PPPLF
Type
Person
Role
Executive
Programs
PPP, PPPLF
Updated

The profile

CEO and primary owner of MBE Capital Partners, a New York nonbank PPP lender. He pleaded guilty on March 23, 2023 to conspiracy to commit wire fraud (S.D.N.Y. 1:22-cr-00251-LJL) over false statements used to obtain SBA lender approval, financing and a PPP loan for his own company. He was sentenced July 27, 2023 to 54 months, with restitution of $71,711,893.07.

Individuals whose conduct was challenged or called into question during or after the pandemic. See sources: DOJ plea release, March 23, 2023 Judgment, July 27, 2023

In the archive

Identity and role

Rafael Martinez, of Franklin Lakes, New Jersey, was CEO and primary owner of MBE Capital Partners, LLC ("MBE"), a New York limited liability company formed in March 2015. Republic Group, LLC (a/k/a Republic Group Parts, LLC), also owned and controlled by Martinez, served as MBE's holding company. MBE was one of the SBA-approved nonbank lenders that originated Paycheck Protection Program loans.

Before MBE

The DOJ releases do not describe any business career for Martinez prior to MBE; the criminal complaint describes the company's own marketing claims. Prosecutors say the financial statements Martinez submitted to win MBE's SBA lender approval were fabricated (DOJ releases).

The scheme and pandemic-relief role

According to the DOJ releases and the (S2) superseding information Martinez pleaded guilty to, he used false statements and forged documents to get MBE approved as a nonbank PPP lender and to raise the money it lent. The criminal complaint and superseding indictment are cited to the docket.

On April 9, 2020, four days after applying for a PPP loan for his own holding company, Martinez applied to the SBA for MBE's nonbank-lender status. He said MBE had originated and serviced more than $3.8 billion in loans or receivables from 2017 through 2019, and he submitted financial statements he called audited. On April 27, 2020, he sent the same "audited" financials to a life insurance company, pitching PPP loans "for minority and women-owned small businesses." The insurer wired MBE $100 million on May 13, 2020.

MBE pledged that money as collateral to borrow about $832 million through the Federal Reserve's Paycheck Protection Program Liquidity Facility. It then made about $823 million in PPP loans to roughly 36,600 businesses and collected about $71.3 million in lender fees.

Their own relief

On April 5, 2020, Martinez applied to a bank for a PPP loan on behalf of Republic Group d/b/a MBE, representing that MBE had as many as 15 employees and roughly $119,390 in average monthly payroll in 2019. Prosecutors say MBE actually had at most four employees and no more than $25,000 in average monthly payroll during that period. They say Martinez supported the false numbers with forged, doctored IRS Forms 941 bearing a New York tax preparer's forged signature. MBE was approved for and received a PPP loan of approximately $283,764, most of which the government says was not used for payroll or other business expenses.

  • Arrested: March 1, 2022 (magistrate complaint 1:22-mj-01988), on charges including bank fraud, wire fraud, false statements to a bank and to the SBA, and aggravated identity theft — allegations at that stage.
  • Indicted: 2022; superseded in January 2023 (S1) (case summary). Martinez moved to dismiss the wire-fraud count, arguing under Cleveland, Kelly v. United States, and Blaszczak that a scheme to obtain government approval is not wire fraud; U.S. District Judge Lewis J. Liman denied the motion in March 2023 (case summary).
  • Pleaded guilty: March 23, 2023, to one count of conspiracy to commit wire fraud (18 U.S.C. § 371) under the (S2) superseding information, waiving indictment on that count.
  • Sentenced: July 27, 2023, to 54 months in prison and three years of supervised release. He was ordered to pay restitution of $71,711,893.07, close to the $71.3 million in lender fees. He was also ordered to forfeit $44,546,712.94. The forfeiture covered seized bank accounts, a home in Franklin Lakes, New Jersey, and a property in the Dominican Republic. It also covered five vehicles: a Ferrari 488 Spider, a 1962 Mercedes-Benz 190, a BMW 750, a Bentley Continental GT and a Porsche 911 Turbo.
  • Forfeiture after sentencing: in June 2023 the court forfeited a Citibank account in MBE Capital Partners' name as a substitute asset. The Federal Reserve Bank of San Francisco, the PPPLF lender, claimed part of the money in it, and in September 2023 the government filed a proposed stipulation with the Reserve Bank settling who got which funds (government letter, Dkt. 87). Final orders of forfeiture followed in November 2023 and later; the government asked for a third one on August 13, 2024, saying no third party had claimed the property (Dkt. 106).
  • The U.S. Attorney's Office for the Southern District of New York prosecuted the case with the SBA Office of Inspector General and other agencies (DOJ releases).

Since 2025

Martinez served his prison term at FCI Lewisburg, then spent time at a residential reentry center and on home confinement, according to a March 4, 2026 letter from his lawyers at Willkie Farr & Gallagher. His three years of supervised release began on December 30, 2025. In February 2026 the court let him travel to the Dominican Republic to help his 93-year-old mother with her estate, and asked the government whether the travel restriction should stay; the government did not respond by the February 20 deadline. On March 5, 2026, Judge Liman allowed domestic and international travel at Probation's discretion, with advance notice of dates, method and lodging. The letter said he was "pursuing business opportunities that also require international travel" (Dkt. 112).

Court records

Sources

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