A federal grand jury in the Central District of California returned an indictment alleging an $18 million scheme to obtain Paycheck Protection Program and Economic Injury Disaster Loan funds. The Department of Justice said applications allegedly sought more than $15.7 million in PPP funds and more than $2.6 million in EIDL funds. The alleged misrepresentations concerned businesses’ employee numbers, payroll, revenues, and eligibility, and included supporting tax documentation. Prosecutors also allege that funds were used for unauthorized purposes, including private property, business startup costs, and payments to family members. The indictment charges three counts of wire fraud and one count of money laundering. These remain allegations; the charges do not establish guilt.

Why it matters

  • The case highlights alleged exploitation of emergency small-business lending programs through false application and tax information.
  • Investigators included the FBI, IRS Criminal Investigation, and the Small Business Administration Office of Inspector General.