In this article, you will get all the information regarding Man Faces Federal Charges Involving $5 Million in Alleged Fraud – NBC 6 South Florida
Likely coming soon to a government auction site near you: a six-bedroom, six-bath vacation rental home, with pool and hot tub, conveniently located just three miles from Walt Disney World.
Sold less than three years ago for just $410,000, it was a real steal because the $410,000 in cash used to buy the property – federal prosecutors now allege – were proceeds of $1.7 million in fraudulently obtained Paycheck Protection Program loans.
As NBC 6 Investigators first reported in March 2022, one of the companies getting the PPP money bought the house just 18 days after getting its $400,000 PPP check.
That’s just one part of a criminal complaint that alleges Jose Alfredo Fernandez, owner of a now-defunct Miami tax preparation business, defrauded the government of nearly $5 million.
In addition to the PPP fraud, Fernandez is accused of cashing over $900,000 in fake checks and obtaining more than $2 million in fraudulent tax refunds from 2016 to 2019, in part by stealing the identities of clients of his tax preparation business.
Fernandez first caught the attention of the NBC 6 Investigators in 2016, when clients of his Miami tax preparation business claimed he filed false returns in their names that produced inflated refunds — and then kept the refunds.
Fernandez soon moved to Georgia, where the U.S. Attorney for the Northern District of Georgia filed a five-count criminal information against him on Jan. 25 alleging wire fraud, bank fraud and aggravated identity theft, according to court records.
He pleaded not guilty, but the court docket shows he and the government have agreed to a change of plea hearing later this month. Attorneys for both him and the government have not returned calls and email seeking comment.
Other than seeking possession of the house in Osceola County, the government filed a notice seeking forfeiture of four cars, including a Mercedes-Benz S550 and a 2020 Tesla Model X, and $312,000 in cash held in bank accounts in the names of him, his wife and a co-conspirator connected to a Miami convenience store company.
When NBC 6 last year sought comment from Fernandez, 36, on his new-found riches, he said by telephone he could not discuss the loans his companies obtained by, the feds allege, falsely claiming it had more employees and larger payrolls than they actually did. More recent attempts to reach him for comment have been unsuccessful.
Billions meant for small businesses struggling during the pandemic ended up in the hands of fraudsters. NBC 6 Investigators uncover apparent problems in federal loans given to three companies with a South Florida connection.
Our investigation connected Fernandez to three companies that would obtain more than $1.2 million in PPP loans over 24 days in 2020, according to data from the Small Business Administration.
Among the issues we uncovered:
• Records with the Georgia Secretary of State reveal the companies either did not exist or were dissolved for years on February 15, 2020, the date the PPP law states they must have been operating to be eligible;
• Fernandez was arrested in October 2019 on charges of bringing two stolen luxury vehicles into Georgia. A company is ineligible for a PPP loan if an owner of at least 20% equity was subject to criminal charges, the law states (He has since been convicted of those two crimes and nine others related to credit card and identity theft and was placed on eight years’ probation in December, according to court records from Gwinnet County, Georgia);
• In total, the three companies claimed to have 75 employees with payroll costs of nearly $500,000 a month in 2019 – despite not existing or being dissolved in 2019; and
• One of the companies, Everything Housing LLC, paid that $410,000 cash in June 2020 to purchase the vacation rental home when PPP proceeds are not allowed to be used for real estate purchases, according to federal rules and law.
The Paycheck Protection Program was created in March 2020 to help small businesses hit hard by the then-emergent pandemic to continue paying employees, rent, utilities and some other expenses. If the loans were obtained legally and the funds were used properly– with at least 60% going to payroll costs – the recipients do not have to pay back a cent. The loans are forgiven.
The Small Business Administration has paid out nearly $790 billion processing more than 11 million PPP loans, giving businesses and employees struggling with the pandemic a much-needed lifeline.
But the program, which ended in May 2021, has also been popular with fraudsters, with billions of dollars sent to people and companies that were not eligible for the amounts they received or for any loan at all, according to a 2021 SBA Inspector General report.
The two top states for PPP fraud, according to the feds: Florida and Georgia.
Man Faces Federal Charges Involving $5 Million in Alleged Fraud – NBC 6 South Florida
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