U.S. Attorney Roger B. Handberg Announced Outstanding Results In His Team’s Fight Against Covid Fraud in the Middle District of Florida
On May the Fourth (be with you) 2022, United States Attorney Roger B. Handberg announced the results of his offices in the Middle District of Florida to combat COVID-19 fraud. The efforts included coordinated investigations by the Criminal, Asset Recovery, and Civil Divisions of DOJ, along with federal, state, and local law enforcement agencies. His successful victories against the dark lords of corruption are results of which any Jedi would approve,
In the words of U.S. Attorney Handberg.:
“Throughout the pandemic, my office and our law-enforcement partners have used all available methods to combat fraud related to COVID-19, and we will continue to do so, After the United States instituted multiple programs to financially assist those most harmed by the pandemic, criminals sought to defraud those programs for personal enrichment at the expense of the taxpayers who funded these programs. We will continue to disrupt these fraud schemes, prosecute those who commit crimes, and return ill-gotten gains through our efforts.
The DOJ Press Release dated May 4, 2022 is the source of this quote and other facts in this article.
Middle District of Florida COVID-19 Fraud Task Force
In March 2020, the United States Attorney’s Office joined with federal, state, and local law enforcement agencies to form the Middle District of Florida COVID-19 Fraud Task Force. Their purpose was to identify, investigate, and prosecute fraud related to the ongoing COVID-19 pandemic. Since its inception, the Task Force has prosecuted 28 defendants for fraud schemes. All of these schemes were designed to exploit federal programs that were created or expanded to address the COVID-19 pandemic, including the Paycheck Protection Program (“PPP”), Economic Injury Disaster Loans (“EIDL”), Unemployment Insurance (“UI”), and the Main Street Lending Program (“MSLP”). These defendants collectively sought to defraud the United States of over $35 million. Eighteen of those defendants have already been found guilty, while prosecution remains pending against ten defendants. Nice work by the Middle District COVID-19 Fraud Task Force.
The Task Force has also already recaptured more than $14.3 million of PPP, EIDL, and UI funds that were fraudulently obtained. Another $8.5 million in pandemic fraud proceeds have been seized and are pending civil or criminal forfeiture. Money returned to us, the taxpayers, and taken from the dark lord fraudsters.
Fake Movie Mogul Case in Seminole County
One particularly egregiois example of this is a 45 year old Croatian, phony movie mogul in Chuluota, Seminole County, Florida. He obtained a $7.2 million PPP loan for a non-existent movie production company. The scammer used almost $3.5 million of the PPP loan proceeds to buy a Lincoln Navigator, a Maserati, and a Mercedes, and a 12,579 square foot mansion with seven bedrooms, 11 bathrooms, a four-car garage, theater room, resort-style pool and spa area, tennis courts, and a 5-stall horse barn. All located on more than twelve acres, pictured below. Yup, fraud is bad. Whistleblowers, don’t hesitate to turn in these scumbags.
The Middle District Fraud Team completed a civil forfeiture of the bogus, fraudster home, selling it earlier in 2022 for more than $4 million. This phony Croatioan movie mogul has been indicted in Orlando and was arraigned on April 29, 2022, after being successfully extradited from Croatia. Way to go! The Justice Department’s Office of International Affairs helped the Fraud Team to secure the arrest and extradition.
This conman is just one of many who have been caught defrauding the government’s Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. This is a federal law enacted March 2020. It is designed to provide emergency financial assistance to Americans suffering the economic effects of the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in potentially forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if the business spends the proceeds on these expenses within a set time-period and uses at least a certain percentage of the loan towards qualifying business expenses.
The phony movie mogal’s PPP loan application falsely claimed that his New York business, MagnifiCo, had 441 employees and monthly payroll expenses in 2019 of more than $2.8 million. In truth, MagnifiCo, had few, if any, employees other than the conman and his girlfriend. His company did not report any wages to the IRS for 2019. In support of his PPP loan application, this guy submitted fake W-2s for phony employees. All a lie, although many of the names and social security numbers submitted were of actual people. They just were not his employees. That’s yet another reason to guard your personal identification. And still more reason to turn in these pandemic profiteers. Blow the whistle on crooks like this.
Roofing Company Fraud Case
Another example of the ongoing battle with pandemic fraudsters concerns a guy in Ft. Myers. He obtained a $2.1 million PPP loan by falsely stating that he intended to use the money for his roofing company. Right. In fact he used the money right away for personal purchases, including nearly $700,000 for a 40’ catamaran boat, pictured below.
He was convicted in June 2021 after a trial in Fort Myers District Court. In June 2021, he was sentenced to over three years in federal prison and was ordered to forfeit the boat and over $3 million. Know people like this? Turn them in. Follow the provisions of the False Claims Act properly and you could receive a bounty for your troubles.
Still More Pandemic Fraud Cases
Another example concerned online based COVID-19 fraud committed by three men in Vietnam. They were falsely claiming to sell personal protection equipment for the virus. They were using hundreds of web pages to steal money from consumers seeking to purchase the masks. The DOJ was somehow able to stop the payments from U.S. purchasers and enjoin the websites from being hosted by a U.S. company. The men are now in custody in Vietnam and are facing criminal charges there.
Yet another fraud involved a Tampa pain management practice. They just paid a $1.3 million penalty under the Financial Institutions Reform, Recovery, and Enforcement Act. This was part of a larger civil settlement to resolve DOJ claims that the defendants improperly applied for a PPP loan of over $5.9 million while engaged in unlawful Medicare overbilling. Similarly, in two recent bankruptcy proceedings, debtors were required to return PPP loans totaling almost $2 million because the United States objected to their obtaining the loans while also seeking bankruptcy protections. Again, see fraud, report it. Help save all taxpayers money from government fraud.
Big Team Effort
The Middle District Fraud Team has worked well with many other Jedi’s of justice in the area, including the Federal Bureau of Investigation, United States Secret Service, Internal Revenue Service—Criminal Investigation, Department of Labor—Office of Inspector General, U.S. Postal Service, Federal Housing Finance Agency, Small Business Administration, Federal Deposit Insurance Corporation—Office of Inspector General, Bureau of Alcohol, Tobacco and Firearms, Metropolitan Bureau of Investigation, the Tampa Police Department, the Orlando Police Department, and the Orange County Sheriff’s Office. The cases are being prosecuted by many Assistant United States Attorneys throughout the Middle District of Florida. The dark lords have met their match, in Central Florida at least.
This good work has all been done under the impressive leadership of United States Attorney Roger B. Handberg. Managing large teams like this and catching this many crooks, this fast, requires the force to be with you. A Fraud Is Bad lightsaber salute to Roger Handberg.
If you know about fraud, report it, be a Qui Tam Jedi whistleblower. As Yoda might say, if the force within, you can find, and the False Claims Act procedures, you can follow, a share of the bounty you may receive.