Valley Man Convicted for PPP Loan Fraud | San Fernando Valley Business Journal
Tuesday, March 29, 2022
A federal jury has convicted a San Fernando Valley man for submitting fraudulent loan applications to the Paycheck Protection Program, submitting false statements to a financial institution and money laundering.
According to court documents and evidence presented at trial, Robert Benlevi, 53, of Encino, submitted 27 PPP applications to four banks between April and June 2020 on behalf of eight companies solely owned by Benlevi. In the applications, Benlevi sought a total of $27 million in forgivable PPP loans guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
In the fraudulent applications, Benlevi represented that each of his companies had 100 employees and average monthly payroll of $400,000, even though he knew that the companies did not have any employees or payroll expenses. Benlevi also submitted fabricated IRS documents falsely stating that each of the companies had an annual payroll of $4.8 million. Based on Benlevi’s fraudulent loan applications, three of Benlevi’s companies — 1Stellar Health, Bestways2 Health and Joyous-Health4U — obtained $3 million in PPP funds.
Although Benlevi falsely represented that the funds sought through the PPP loan applications would be used for payroll and certain other business expenses, he instead used them for personal expenses, including cash withdrawals, personal credit card payments, transfers to other personal and business accounts, and Renting an oceanfront apartment in Santa Monica.
In a single day, Benlevi withdrew from the Bestways2 Health account $248,000 of PPP funds in cashier’s checks, which were deposited into other accounts that Benlevi controlled.
Benlevi was convicted of bank fraud, false statements to a financial institution and money laundering. He is scheduled to be sentenced June 27 and faces a maximum penalty of 30 years in prison.
The FBI, Small Business Administration-Office of Inspector General and Federal Deposit Insurance Corp. Office of Inspector General investigated the case.