Cape Coral Man Sentenced To Over 3 Years In Federal Prison For COVID Relief Fraud
Summary
United States District Judge Sheri Polster Chappell in Fort Myers, Florida sentenced Diop McKenzie, 30, of Cape Coral, to 45 months in federal prison for bank fraud, wire fraud and aggravated identity theft, ordering restitution to the Small Business Administration and forfeiture of $117,832. McKenzie pled guilty on June 11, 2024. According to court documents, in May 2020 McKenzie used another person's name to apply for a $20,832 Paycheck Protection Program loan for a claimed Cape Coral business and used the funds for personal benefit. In July 2020 McKenzie used another individual's name, social security number and date of birth to apply for a $97,000 Economic Injury Disaster Loan, misstating the business's revenue and cost of goods sold. The release states that the individual had not applied for the loan or received any of its funds.
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Full text
Fort Myers, Florida – United States District Judge Sheri Polster Chappell today sentenced Diop McKenzie (30, Cape Coral) to 45 months in federal prison for bank fraud, wire fraud, and aggravated identity theft. As part of his sentence, the court ordered McKenzie to pay restitution to the Small Business Administration (SBA) and entered an order of forfeiture in the amount of $117,832, the proceeds of the bank and wire fraud. McKenzie pled guilty on June 11, 2024. According to court documents, in May 2020, McKenzie submitted a fraudulent Paycheck Protection Program (PPP) application to a financial institution that is federally insured by the Federal Deposit Insurance Corporation (FDIC). McKenzie fraudulently applied for the PPP loan through the SBA in the amount of $20,832 using the name of another individual, and McKenzie falsely represented that he had a business located in Cape Coral, Florida. McKenzie fraudulently represented in his application that the proceeds of the PPP loan would be used for payroll costs and for rent for the business. McKenzie’s false and fraudulent representations caused the financial institution to approve and fund the PPP loan for his business, but the investigation revealed that the loan proceeds were not used for business related purposes. Instead, McKenzie used the PPP funds for unauthorized purposes and for his own personal benefit. In July 2020, McKenzie submitted a fraudulent Economic Injury Disaster Loan (EIDL) application to the SBA for a $97,000 loan using the name of another individual and using the other person’s social security number. Further, McKenzie falsely represented the revenue for his purported business and falsely represented the cost of goods sold for the twelve months prior to the date of the disaster. McKenzie used, without lawful authority, a means of identification of another person. He used another individual’s name, social security number, and date of birth in a fraudulent loan application that was submitted to the SBA. The investigation revealed that the individual had not applied for the EIDL loan fraudulently obtained in his name, nor had the individual received any funds from the loan. The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 2020. It was designed to provide emergency financial assistance to millions of Americans who were suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of forgivable loans to small businesses for job retention and certain other expenses through the PPP. The EIDL program was designed to provide economic relied to small businesses that were experiencing substantial financial disruption due to the COVID-19 pandemic. EIDL proceeds could be used for payroll expenses, sick leave, production costs, and business obligations, such as debts, rents, and mortgage payments. If an applicant also obtained a loan under the PPP, the EIDL funds could not be used for the same purpose as the PPP funds. This case was investigated by the United States Secret Service, with assistance from the Cape Coral Police Department. It was prosecuted by Assistant United States Attorney Yolande G. Viacava.
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