Nivah Garcis, 51, of North Plainfield, New Jersey, today pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to fraudulently obtaining over $1 million in federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL).
Garcis was charged with one count of conspiracy to commit bank fraud, three counts of wire fraud, and one count of money laundering.
According to U.S. Attorney Philip R. Sellinger, documents filed in this case and statements made in court, Garcis conspired with at least one other individual to submit two fraudulent PPP loan applications to a lender on behalf of purported businesses that she controlled.
She also submitted three fraudulent EIDL loan applications to the U.S. Small Business Administration (SBA) on behalf of three business that she owned.
She then engaged in financial transactions with the loan proceeds, including for the purchase of real estate.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic.
One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP.
In April 2020, Congress authorized over $300 billion in additional PPP funding.
The applications Garcis submitted each contained fraudulent representations to the lender, a Federal Home Loan Bank member, and the SBA, including bogus federal tax documents purportedly from the IRS.
Garcis also fabricated the existence of employees and wages paid through the purported businesses.
According to IRS records, however, none of the purported tax documents that Garcis submitted in support of her loan applications were ever in fact filed with the IRS.
Based on Garcis’ misrepresentations, her loan applications for her purported businesses were approved for approximately $1.05 million in federal COVID-19 emergency relief funds meant for distressed small businesses.
Garcis then used the proceeds to purchase property and for various personal expenses.
The count of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine.
The counts of wire fraud each carry a maximum penalty of 20 years in prison and a maximum fine of $250,000.
The count of money laundering carries a maximum penalty of 10 years in prison and a maximum fine of $250,000. Sentencing is scheduled for Jan. 31, 2023.
A federal watchdog recently found that fraudsters may have stolen $45.6 billion from the nation’s unemployment insurance program during the pandemic, using the Social Security numbers of dead people and other tactics to deceive and bilk the U.S. government.
The new estimate is a dramatic increase from the roughly $16 billion in potential fraud identified a year ago, and it illustrates the immense task still ahead of Washington as it seeks to pinpoint the losses, recover the funds and hold criminals accountable for stealing from a vast array of federal relief programs.
“The CARES Act is 880 pages of outrage and corruption, that gave Republican President Donald Trump a $6 trillion slush fund without adequate oversight or guidance to prevent abuses,” said Lisa McCormick, the progressive Democratic challenger to Rep. Bonnie Watson Coleman when the congresswoman voted to put taxpayer money at risk. “Instead of stabilizing the economy, it enriches the rich and insults the 99 percent of Americans who follow the rules. This is worse than the TARP bailouts under Bush.”
When Congress voted to give Trump a $6 trillion slush fund McCormick, said the bad news far outweighs any good from the emergency bailout sold as a way to help the country recover from the coronavirus pandemic.
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