Middlesex Man Sentenced to 30 Months in Prison for Paycheck Protection Program Fraud Scheme (2021-12-09)

Summary

A U.S. Attorney's Office for the District of New Jersey press release dated 2021-12-09 announcing that Bernard Lopez of Middlesex County was sentenced by U.S. District Judge Peter G. Sheridan to 30 months in prison and three years of supervised release, with restitution of $137,000 and forfeiture of $481,502. Lopez had pleaded guilty to one count each of bank fraud and theft of government funds. According to the release, a stolen U.S. Treasury check altered to $211,886 was deposited into an account Lopez created for Pezlo Management LLC. It states that on June 24, 2020 Lopez submitted a PPP application claiming 25 employees and a monthly payroll of approximately $192,000 for a company with no employees, and received $481,502.

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TRENTON, N.J. – A Middlesex County, New Jersey, 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.
Bernard Lopez, 40, previously pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to an information charging him with one count each of bank fraud and theft of government funds. Judge Sheridan imposed the sentence today by videoconference.
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 in the amount of $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 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, Judge Sheridan sentenced Lopez to three years of supervised release and ordered restitution of $137,000 and forfeiture of $481,502.
Acting U.S. Attorney Honig credited special agents and task force officers of the U.S. Department of the Treasury-OIG, under the direction of Assistant Inspector General for Investigations Sally D. Luttrell, and special agents and task force officers of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to today's sentencing. She also thanked special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark, and special agents of the Federal Deposit Insurance Corporation Office of Inspector General, under the direction of Special Agent in Charge Patricia Tarasca for assistance.
The government is represented by Assistant U.S. Attorney Perry Farhat of the Government Fraud Unit of the U.S. Attorney’s Office’s Criminal Division in Newark.

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