U.S. Department of Labor OIG, Three Individuals Indicted in Multistate COVID-19 Relief Program Fraud Scheme (USAO D-NJ 04/17/2024) (2024-04-29)

Summary

A press release from the U.S. Attorney's Office, District of New Jersey, dated April 17, 2024, announcing that Eric Rivera, 42, of Norcross, Georgia; Adrienne Ponzo, 49, of Bear, Delaware; and James Wessels, 54, of Middletown, Delaware, were indicted for fraudulently obtaining approximately $5 million of PPP and EIDL loans and laundering the proceeds. According to the indictment, Rivera submitted fraudulent PPP applications with fake bank statements and IRS tax forms for companies Rivera controlled, which were paid $285,000, and recruited owners of businesses with little or no operations, receiving 15 percent to 50 percent of the loan proceeds. Wessels allegedly created fraudulent IRS tax forms and fake payroll checks, and Ponzo allegedly prepared fraudulent EIDL applications submitted to the SBA. The defendants were charged by complaint in July 2023.

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PRESS RELEASE



Three Individuals Indicted in
Multistate COVID-19 Relief
Program Fraud Scheme
Wednesday, April 17, 2024


For Immediate Release
U.S. Attorney's Office, District of New Jersey

CAMDEN, N.J. – Three individuals were indicted for their roles in fraudulently obtaining
approximately $5 million of federal Paycheck Protection Program (PPP) loans and
Economic Injury Disaster Loans (EIDL) and for laundering the loan proceeds, U.S.
Attorney Philip R. Sellinger announced today.

Eric Rivera, 42, of Norcross, Georgia, is charged with one count of bank fraud conspiracy,
three counts of bank fraud, one count of wire fraud conspiracy, two counts of wire fraud,
one count of money laundering conspiracy, and eight counts of money
laundering. Adrienne Ponzo, 49, of Bear, Delaware, is charged with one count of wire
fraud conspiracy, two counts of wire fraud, one count of money laundering conspiracy,
and two counts of money laundering. James Wessels, 54, of Middletown, Delaware, is
charged with one count of bank fraud conspiracy, three counts of bank fraud, and one
count of money laundering conspiracy. They were charged by complaint in July 2023.

According to the indictment:

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted
in March 2020 and was designed to provide emergency financial assistance to the
millions of Americans who are suffering the economic effects caused by the COVID-19
pandemic. One source of relief provided by the CARES Act was the authorization of
hundreds of billions of dollars in forgivable loans to small businesses for job retention
and certain other expenses, through a program referred to as the Paycheck Protection
Program (PPP). The CARES Act also authorized the U.S. Small Business Administration
(SBA) to provide Economic Injury Disaster Loans (EIDLs) of up to $2 million to eligible
small businesses that were experiencing substantial financial disruption due to the
COVID-19 pandemic.
To obtain a PPP or EIDL loan, a qualifying small business was required to apply
and provide information on its operations, including the number of employees and
revenues or expenses. Businesses generally had to provide supporting documentation
such as tax returns and bank statements.

Rivera conspired with Wessels and others to defraud a participating lender in the PPP
program. Rivera submitted fraudulent PPP loan applications for two companies he
controlled, which included fake bank statements and IRS tax forms. The lender approved
the PPP loans and paid Rivera’s companies $285,000. Rivera also recruited individuals
who owned businesses with little or no operations and introduced them to a conspirator
who prepared fraudulent PPP loan applications for these companies. Most of these PPP
loan applications also included fake bank statements and tax forms. After the lender
approved the PPP loans, Rivera received payments of 15 percent to 50 percent of the
loan proceeds, via wire transfer or check, for his role in orchestrating this scheme.
Wessels created fraudulent IRS tax forms for the PPP loan applications for Rivera’s
companies and for the other companies for which Rivera was paid. Wessels was paid a
fee for each fraudulent tax form he created.

Wessels also conspired with two individuals who received fraudulent PPP loans from the
lender to structure the spending of the PPP loan proceeds to conceal that the proceeds
actually were being spent on non-payroll expenses. Wessels created fake payroll checks
from the companies and the business owners distributed the fake payroll checks to
friends and family members, who cashed the checks and returned the majority of the
cash to the business owners. The lender subsequently forgave these PPP loans based
on forgiveness applications that falsely stated that most of the loan proceeds were
spent on payroll expenses.

Rivera also conspired with Ponzo and others to defraud the SBA. After the CARES Act
was passed, Rivera recruited individuals who owned companies with little or no
operations and introduced them to Ponzo, who prepared fraudulent EIDL applications
for these businesses and caused them to be electronically submitted to the SBA. Ponzo
prepared fraudulent bank statements and tax returns for companies that did not have
them. After the SBA approved the EIDL loans, Rivera received payments of 15 to 50
percent of the loan proceeds, via wire transfer or check, for his role in orchestrating this
scheme. Rivera, in turn, wired a portion of the loan proceeds to Ponzo for her role in the
scheme.

The counts of bank fraud conspiracy and bank fraud are each punishable by a maximum
of 30 years in prison and a $1 million fine. The counts of wire fraud conspiracy and wire
fraud are each punishable by a maximum of 20 years in prison and a $250,000 fine, or
twice the gross gain or loss from the offense, whichever is greatest. The counts of
conspiracy to commit money laundering are each punishable by a maximum of 20 years
in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever
is greatest. The counts of money laundering are each punishable by a maximum of 10
years in prison and a $250,000 fine, or twice the gross gain or loss from the offense,
whichever is greatest.

U.S. Attorney Sellinger credited special agents of the Federal Deposit Insurance
Corporation – Office of the Inspector General, under the direction of Patricia Tarasca,
Special Agent-in-Charge, New York Regional Office; special agents of the FBI’s South
Jersey Resident Agency, under the direction of Special Agent in Charge Wayne Jacobs in
Philadelphia; special agents of the Social Security Administration, Office of the Inspector
General, New York Field Division, under the direction of Acting Special Agent in Charge
Bradley Parker; and special agents of the U.S. Department of Labor, Office of Inspector
General, Northeast Region, under the direction of Special Agent in Charge Jonathan
Mellone, with the investigation leading to the charges.

The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike
forces established throughout the United States by the U.S. Department of Justice to
investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-
state pandemic relief fraud perpetrated by criminal organizations and transnational
actors. The strike forces are interagency law enforcement efforts, using prosecutor-led
and data analyst-driven teams designed to identify and bring to justice those who stole
pandemic relief funds.

The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the
Criminal Division in Camden and Jason M. Richardson, Attorney in Charge of the U.S.
Attorney’s Office in Camden.

The charges and allegations contained in the charging instrument are merely
accusations, and the defendants are presumed innocent unless and until proven guilty.



riveraponzowessels.indictment.pdf
Updated April 17, 2024

Topic
CORONAVIRUS
Component
USAO - New Jersey
Press Release Number: 24-135


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