Those who misused the federal government’s Paycheck Protection Program (PPP), which was meant to help struggling businesses stay afloat during the COVID-19 pandemic, continue to pay a price in the legal arena.
According to People magazine, one of the latest such offenders is Miami real estate broker Daniela Rendon, 31.
She was accused of improperly using $381,000 in COVID-19 relief funds in the form of loans and grants to finance a luxury lifestyle, which included a costly condo, a Bentley automobile and cosmetic surgery.
This led to an indictment last February for 10 counts of white-collar criminal offenses related to misuse of the COVID-19 relief program. Those offenses included 2 counts of money laundering, 7 counts of wire fraud and 1 count of aggravated identity theft, according to a news release provided by the U.S. Attorney’s Office for the Southern District of Florida.
In court, Rendon pleaded guilty to 1 count of wire fraud and was sentenced to 3 ½ years in federal prison. Her criminal defense lawyers had argued for a lighter sentence of 5 years of probation, while Assistant U.S. Attorney Jonathan Bailyn had recommended the 3 ½ year sentence.
U.S. District Judge K. Michael Moore agreed with the prosecutor in setting the sentence. He also ordered Rendon to pay $198,990 in restitution to the U.S. government.
The sentence was actually light in view of the fact that the single count of wire fraud to which Rendon pleaded guilty last April carries a maximum penalty of 20 years in prison. It may have helped Rendon’s case that she showed contrition for her crime.
At her sentencing hearing in federal court in Miami, Rendon first claimed she had unlawfully applied for the COVID-19 relief funds because she thought “everybody was doing it” at the time.
But she also said she came to realize that those who suffered from her actions were not “faceless entities of the U.S. government” but rather the “countless individuals and businesses” who needed such aid during the pandemic’s economic crisis.
Besides her guilty plea, Rendon issued a confession and made a 30-page apology to the court.
PPP fraud case included false claims, false tax forms
According to the U.S. Attorney’s Office in the Southern District of Florida, Rendon had submitted fraudulent applications seeking COVID-19 relief funds for her real estate business from the PPP program and the Small Business Administration. In doing so, she allegedly falsified her payroll and revenue numbers and submitted fraudulent tax forms to the Internal Revenue Service.
As a result, she received $381,000 in fraudulent funds, which she then pretended to disburse throughout her business by distributing checks to herself, to family members and to friends after enrolling with a payroll processor.
But the money was actually used to purchase a 2021 Bentley Bentayga for herself, as well as to pay for her rent on a luxury Biscayne Bay apartment and for cosmetic dermatology procedures, among other extravagances.
Rendon’s indictment was made after the attorney general launched a COVID-19 Fraud Enforcement Task Force in May of 2021 to combat and prevent pandemic-related fraud.
Further, according to the U.S. Attorney’s Office for the Southern District of Florida, in September of 2022, the attorney general chose that office to head 1 of 3 national COVID-19 Fraud Strike Force Teams. These teams were created to enhance existing efforts to combat and prevent financial fraud related to COVID-19 programs.
How much COVID-19 relief fraud has happened?
In case you’re wondering how much COVID-19 relief fraud has actually happened in America, the Office of the Inspector General for the Small Business Administration reported last June that at least 17% of the $1.2 trillion in relief funds distributed via the PPP and via Economic Injury Disaster Loans (EIDL) was obtained by fraudulent means.
Many people then took unfair advantage of a system that, in the case of the PPP, was established as a $953-billion business loan program via the Coronavirus Aid, Relief and Economic Security Act (CARES Act).
Such loans from the federal government were intended to help nonprofit organizations, self-employed workers, sole proprietors, small businesses and tribal businesses continue to pay their workers during the pandemic’s many shutdowns.
The low-interest PPP loans were meant to be partly or fully forgiven if a business retained its employee numbers and kept its employees’ wages stable despite full or complete shutdowns of the business during the pandemic.
Fraud then occurred when some persons and businesses took advantage of the PPP’s open-door setup, which allowed them to self-certify their need for PPP funds with scant vetting or formal oversight.
The resulting fraud that arose led to a federal crackdown that has resulted in arrests and convictions for the white-collar crime of PPP fraud. Hundreds of defendants have been prosecuted, and millions of dollars in cash, real estate properties and luxury items have been recovered.
Get a criminal defense lawyer skilled in fraud cases
If you or a family member living in Houston, Sugar Land, The Woodlands, Conroe or elsewhere in Harris County, Fort Bend County or Montgomery County face an accusation or, worse, a charge of a white-collar crime such as PPP fraud or COVID-19 relief funds fraud, you must notify a skilled criminal defense lawyer with the knowledge and experience to protect defendants’ legal rights.
That means contacting the award-winning Neal Davis Law Firm, whose history of success handling non-violent white-collar crime cases has brought the firm honors and recognition from its legal peers.
Notify us today of your PPP fraud case or other white-collar crime case, and let us arrange a confidential consultation to explore your legal defense.