Middlesex County Man Admits $1.6 Million Paycheck Protection Program and Economic Injury Disaster Loan Fraud Scheme
From the U.S. Attorney’s Office, District of New Jersey:
NEWARK, N.J. – A Middlesex County, New Jersey, man today admitted his role in a scheme to defraud lenders and the Small Business Administration (SBA) by fraudulently obtaining approximately $1.6 million in federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL), U.S. Attorney Philip R. Sellinger announced.
Jordan C. Larkins, 32, of Edison New Jersey, pleaded guilty before U.S. District Judge Zahid N. Qurashi by videoconference to an information charging him with one count wire fraud, one count bank fraud, and one count money laundering.
According to documents filed in this case and statements made in court:
From May 2020 through July 2020, Larkins submitted three fraudulent PPP loan applications to three different lenders and 11 EIDL applications to SBA on behalf of numerous purported businesses.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on payroll expenses. The EIDL program was an SBA program that provided low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters. The CARES Act authorized the SBA to provide EIDLs of up to $2 million to eligible small businesses that were experiencing substantial financial disruption due to the COVID-19 pandemic.
On his 14 fraudulent PPP and EIDL applications, Larkins made false representations to the participating lenders and the SBA, including fake federal tax return documentation for his purported businesses and fake bank statements. He also fabricated the identities of certain individuals listed as applicants and the corresponding driver’s licenses of those purported applicants.
Based on Larkins’ misrepresentations, he obtained approximately $1.6 million in PPP and EIDL funds. Larkins then misused the funds by making a series of cash withdrawals, transferring funds to foreign banks, and for various other personal expenses.
The charge of bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine; the charge of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine; the charge of money laundering carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. Sentencing is scheduled for July 21, 2022.
U.S. Attorney Sellinger credited inspectors of the U.S. Postal Inspection Service, Newark Division, under the direction of Inspector in Charge Damon Wood; special agents of the IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the U.S. Attorney’s Office’s Government Fraud Unit in Newark.