Encino man convicted of $27M COVID relief fraud scheme

An Encino man was convicted by a federal jury Monday in a $27 million COVID-19 reduction funds fraud scheme.

Robert Benlevi, 53, was convicted for submitting fraudulent purposes searching for cash from the Paycheck Safety Program (PPP), submitting false statements to a monetary establishment, and cash laundering, the Division of Justice mentioned in a information launch Tuesday.

Benlevi submitted 27 PPP mortgage purposes to 4 banks between April and June 2020 on behalf of eight corporations solely owned by him, in keeping with courtroom paperwork and proof offered at trial.

Within the purposes, Benlevi sought a complete of $27 million in forgivable PPP loans assured by the Small Enterprise Administration below the Coronavirus Assist, Reduction, and Financial Safety (CARES) Act, the DOJ mentioned.

In his fraudulent purposes, Benlevi represented that every of his corporations had 100 staff and common month-to-month payroll of $400,000, though he knew that the businesses didn’t have any staff or payroll bills, in keeping with the division.

He additionally submitted fabricated IRS paperwork falsely stating that every of the businesses had an annual payroll of $4,800,000, the DOJ added.

Based mostly on Benlevi’s fraudulent mortgage purposes, three of his corporations — 1Stellar Well being LLC, Bestways2 Well being LLC and Joyous-Health4U LLC — obtained $3 million in PPP funds.

Though Benlevi falsely represented that the funds can be used for payroll and different enterprise bills, he as an alternative used them for private bills, together with money withdrawals, funds on his private bank cards, transfers to different private and enterprise accounts he managed, and renting an oceanfront house in Santa Monica, the DOJ mentioned.

In a single day, Benlevi withdrew $248,000 of PPP funds in cashier’s checks from the Bestways2 Well being account, and deposited the cash into different accounts he managed.

Benlevi was convicted of financial institution fraud, false statements to a monetary establishment, and cash laundering.

He’s scheduled to be sentenced on June 27 and faces a most penalty of 30 years in jail.