A federal grand jury returned an indictment Tuesday charging a Newark woman with wire fraud, loan fraud, and money laundering in connection with 17 fraudulent loan applications under programs authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
It is the first case of its kind in Delaware related to the PPP program.
According to the indictment, Ana Soto, 40, applied for loans designed to support small businesses during the coronavirus pandemic.
Prosecutors stated that March 2020 and January 2021, using the names of five separate companies, Soto submitted applications to the U.S. Small Business Administration and its authorized lenders, inflating, among other things, the revenues and number of employees of the companies in an attempt to obtain greater payments under either the Paycheck Protection Program “PPP” or Economic Injury Disaster Loans, “EIDL”.
In some instances, Soto falsely claimed businesses that had either already closed or not yet open at the onset of the pandemic were entitled to funds. While many of these applications were denied, Soto obtained approximately $246,000. Soto then used the money for personal expenses, not authorized by the PPP or EIDL program, including purchasing a personal use vehicle.
“In the midst of a global crisis, this defendant took advantage of government programs designed to support small businesses and the employees of those businesses. The defendant’s opportunism, at the expense of the U.S. government and its citizens, deserves sanction, and today’s indictment represents the first step in seeking to hold her accountable for her actions,” Delaware U.S. District Attorney David Weiss stated.
Soto is charged with wire fraud, SBA fraud, and money laundering. If convicted, she faces up to 20 years in prison. However, actual sentences for federal crimes are typically less than the maximum penalties.
IRS Criminal Investigation and the FBI Baltimore Division’s Wilmington Resident Agency investigated this matter. Assistant U.S. Attorney Lesley F. Wolf is prosecuting the case.
Related court documents and information are located on the District Court’s website for the District of Delaware orPACER.
On May 17, 2021, the office of the U.S. Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across the government to enhance efforts to combat and prevent pandemic-related fraud.
Concerns regarding fraud related to pandemic loans accompanied the program’s launch due to the need to disburse money to businesses in dire straits rapidly. However, the fast-track nature of the program led to minimal oversight.
At the same time, loans under the PPP program favored companies with strong banking relationships that often froze out enterprises without those ties. As a result, minority and women-owned businesses were often denied PPP loans or received only minimal amounts.
For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.