Fraud Friday – TD Bank Executive Sentenced to 10 Years After Orchestrating a PPP Fraud Scheme

March 17, 2023

Delaney Sexton
Contributing Editor

Fraud Friday – TD Bank Executive Sentenced to 10 Years After Orchestrating a PPP Fraud Scheme

Daniel Hernandez, the former Regional Manager of TD Bank who previously overlooked 80 employees and over 20 bank branches, was sentenced after trying to obtain $25 million in PPP loans and EIDLs. The conspiracy that involved two other individuals caused $15 million in losses. So far, investigators have recovered $800,000 from the fraud scheme.

Throughout the scheme, Hernandez helped submit more than 90 fraudulent PPP applications to four banks. Two of these banks included TD Bank and Hernandez’s previous employer, Bank of America. He also submitted fraudulent EIDL applications, but most of these loan applications were declined.

He would recruit customers to apply for the loans and direct them on how to file their applications. Further, he would provide fabricated information regarding the business such as inflated payroll expenses and numbers of employees. Afterward, he took advantage of his role at the bank to review and approve these loans whenever it was possible. Daniel advised these applicants on how to launder the loan proceeds to try to prevent them from being detected for fraud.

In return for his work on these loan applications, he would take from 10% to 15% of the loan proceeds as a kickback.

Armando De Leon, a TD Bank employee, was sentenced to 5 years in prison for his role in the conspiracy. Erich Alfonso Barata, president of two companies, is scheduled to be sentenced on April 18.

Source:
DOJ Press Release

Read our previous reporting:
Fraud Friday – Ex-TD Bank Executive Guilty of $17 Million PPP Fraud – 1/13/22