The Government is Accusing 4 People of Carrying Out a $178 Million PPP Fraud Scheme
September 13, 2024
Delaney Sexton
Contributing Editor
The Government is Accusing 4 People of Carrying Out a $178 Million PPP Fraud Scheme
On Monday, an indictment charged four individuals with 23 counts of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. It is alleged that they sent at least 1,300 fraudulent PPP loan applications. Of the $178 million that they applied for, they received $105 million according to the government.
Investigators assert that Eric Karnezis was the head of the fraud scheme, and Fredrico Williams worked with Karnezis as a recruiter. Williams’s goal was to gather fraudulent business information from customers in order to send PPP applications on their behalf. Two borrowers are named on the indictment: Lynisha Wells and Nikkia Bennett.
The recruiters were allegedly well aware that the information they were collecting was false and that many of the businesses did not exist. Karnezis or his coconspirators would craft fictitious documents in support of the fraudulent PPP loan applications including tax documents and false payroll information. In return for the PPP loans, the customers would pay recruiters for their assistance, allegedly.
In the indictment, it states that many of the PPP loans submitted to Capital Plus Financial on behalf of the four individuals included the same email address (e***@accreditedpci.com) and phone numbers (ending in 3863 or ending in 7773). All the Promissory Notes for the submitted PPP applications had the same DocuSign Globally Unique Identifier (GUID). That GUID was associated with the previously mentioned email address. In addition, most of the PPP loans included DocuSign complete certificates signed by the GUID. Lastly, the indictment notes that most of the PPP loan applications for the 4 conspirators originated from the same IP addresses which are attributable to Karnezis.
When reviewing the PPP loan applications from Williams, Wells, and Bennett, some similarities start to appear. Most of their loan applications listed that the business was established in 2017 and had 9 employees. It is also alleged in the indictment that most of the PPP loan applications claimed that the business had a monthly payroll of around $58,000 to $59,000.
Upon conviction, the defendants would have to forfeit property traceable to the violations. Some of the property up for forfeiture includes multiple houses, a boat, a $36,050 watch, a truck camper, a golf cart, and a 2021 Bobcat T66-N Compact Track Loader.
Bennett and Wells made their first appearances in court and were arraigned, and both were released on conditions. Williams will be arraigned later this month.
Karnezis made his initial appearance in court and decided to plead not guilty to the charges. During a detention hearing, he was also released on conditions.