Joao Mendes, 59, has agreed to plead guilty to one count of wire fraud after being charged in connection with a scheme to submit false applications to obtain Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Programs (EIDL) funds through the Small Business Administration (SBA), which were made available under the CARES Act.
Beginning in or around June 2020 until around September 2020, Mendes allegedly “submitted or caused to be submitted” multiple fraudulent PPP and EIDL loan applications on behalf of various entities, charging documents said.
As a result, Mendes and others received over $1.5 million in PPP and EIDL funds, which Mendes spent for “his own personal benefit — including for the purchase of cryptocurrency — or transferred the funds into other accounts he controlled or to other individuals,” the Justice Department said.
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The CARES Act was enacted at the start of the pandemic in March 2020 and was designed to provide emergency financial aid to millions of Americans who were “suffering the economic effects caused by COVID-19.”
Mendes’ fraudulent PPP loan applications “misrepresented the number of employees and the average monthly payroll expenses of his various businesses,” according to the Justice Department.
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He also allegedly submitted false tax records in support of his loan applications.
In his EIDL applications, Mendes allegedly misrepresented the number of employees, gross revenues and costs of goods sold for each business.
Mendes’ wire fraud charge could get him a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss from the offense, according to the Justice Department.
This article originally appeared on The Enterprise: Brockton COVID relief: Joao Mendes charged with CARES Act wire fraud