LOS ANGELES – Two downtown Los Angeles residents have been arrested immediately on a federal prison criticism alleging they fraudulently obtained greater than $300,000 – and tried to acquire a further $1 million – in COVID-relief loans for a number of firms they claimed to personal and function.
Sean Schoepflin, 42, a.okay.a. “Sean Fitzgerald,” and Erika Leon, 44, a.okay.a. “Erika Fitzgerald,” are every charged with one depend of wire fraud, in response to a criticism that was unsealed immediately. They’re anticipated to make their preliminary appearances this afternoon in United States District Courtroom.
Based on an affidavit filed with the criticism, from April 2020 to October 2021, Schoepflin and Leon made quite a few false statements to america Small Enterprise Administration to safe greater than $300,000 – and try to safe a further $1 million – in Financial Harm Catastrophe Loans (EIDLs) for his or her companies.
Schoepflin and Leon allegedly falsely acknowledged that the enterprise entities they created had a number of workers and a number of other hundred thousand {dollars} in revenues, and that they might use the EIDLs for working capital for these companies. Schoepflin additionally allegedly falsely acknowledged on mortgage purposes that he had by no means been convicted of a felony.
Actually, their purported companies – Capital Adventures Inc., Woman Capital Inc., Digital Military Ltd., and Woman Photos LLP – had no workers and little to no income, they used the EIDLs largely for private bills, and Schoepflin had beforehand been convicted of a number of felonies.
For instance, Schoepflin falsely acknowledged in a single mortgage utility that Capital Adventures had revenues of $560,000 within the 12-month interval from February 1, 2019 to January 31, 2020, the affidavit alleges. In June 2020, when an SBA worker despatched an e mail to Schoepflin requesting Capital Adventures’ enterprise tax return to indicate proof of the corporate’s existence as a enterprise entity, Schoepflin allegedly despatched an unsigned tax type that acknowledged that Capital Adventures had product sales or receipts of $625,112 in 2019.
Actually, Capital Adventures didn’t file an IRS Type 1120 for 2019 till July 2021, after it requested and was denied a rise for its EIDL, in response to the affidavit. Moreover, between February 2018 and April 2020, Capital Adventures’ financial institution accounts had whole deposits of roughly $35,000.
The FBI and the Treasury Inspector Normal for Tax Administration investigated this matter. The Small Enterprise Administration Workplace of Inspector Normal offered substantial help with the investigation.
Assistant United States Attorneys David Ryan and Solomon Kim of the Terrorism and Export Crimes Part are prosecuting this case.
The Coronavirus Help, Aid, and Financial Safety (CARES) Act was designed to offer emergency monetary help to tens of millions of People who’re struggling the financial results ensuing from the COVID-19 pandemic. One supply of aid offered by the CARES Act is the authorization of as much as $349 billion in forgivable loans to small companies for job retention and sure different bills by way of the PPP. In April, Congress approved greater than $300 billion in extra PPP funding.
The EIDL program is designed to offer financial aid to small companies which are presently experiencing a short lived lack of income. EIDL proceeds can be utilized to cowl a wide selection of working capital and regular working bills, akin to continuation of well being care advantages, lease, utilities, and fixed-debt funds.
Anybody with details about allegations of tried fraud involving COVID-19 can report it by calling the Division of Justice’s Nationwide Middle for Catastrophe Fraud Hotline at (866) 720-5721 or through the NCDF Internet Criticism Type at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.