Man Who Sought COVID Aid for 800 Fake Workers Sentenced

California man gets 135 months in federal prison
By Rob Quinn,  Newser Staff
Posted Jul 20, 2022 6:00 PM CDT
California Man Gets 11 Years for COVID Aid Scam
Benlevi sought a total of $27 million in forgivable PPP loans guaranteed by the Small Business Administration, the DoJ says.   (Getty Images/alfexe)

Between April and June 2020, Los Angeles man Robert Benlevi applied for COVID aid for eight companies he owns, saying they had 100 employees each and business had been affected by the pandemic. But while the companies existed, at least on paper, the employees were fake, which is why Benlevi will be spending the next 11 years in federal prison. The 53-year-old has been sentenced to 135 months for trying to scam the Paycheck Protection Program for $27 million in forgivable loans, the AP reports.

In March, Benlevi was found guilty of bank fraud, making false statements to a financial institution, and money laundering. Prosecutors say he submitted 27 loan applications to four banks. Most of the applications did not succeed, but three of his companies received a total of $3 million in PPP funds. Evidence shows that instead of using the funds for payroll and other business expenses, Benlevi used the money "for personal expenses, including cash withdrawals, payments on his personal credit cards, transfers to other personal and business accounts he controlled, and renting an oceanfront apartment in Santa Monica," the Department of Justice said in a statement.

The companies that received loans had what SFist calls "somewhat suspicious/goofy-sounding names"—1Stellar Health LLC, Bestways2 Health LLC, and Joyous-Health4U LLC. Prosecutors say that in his fraudulent applications, Benlevi claimed the companies had an average annual payroll of $4.8 million,"even though he knew that the companies did not have any employees or payroll expenses." The DoJ says the case was handled in part by its C OVID-19 Fraud Enforcement Task Force, which has pursued around 1,000 defendants and recovered more than $1 billion. (More fraud stories.)

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