California Man Charged After Collecting $27M through Fraudulent PPP Loans

A California man has been indicted on charges stemming from fraudulent loan applications seeking at least $27 million from the nation's coronavirus relief program, the Paycheck Protection Program (PPP).

Robert Benlevi, 53, of Encino, California, has been charged with falsely submitting 27 loan applications to four different banks in order to obtain government relief from the Paycheck Protection Program. The program was created as part of the 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to work in tandem with the Small Business Administration as a way to help business owners recover from the impact felt by the coronavirus pandemic.

Officials detail that between April and June of 2020 Benlevi submitted these applications on behalf of eight companies that he owned. As a result of his false applications, his companies were issued a total fund of $27 million. In his applications, Benlevi misled the government by detailing in his applications that each business had over a hundred employees and they each had a monthly payroll expense of at least $400,000. As required by the PPP forgivable loans, in order for businesses to qualify, they have to use the money on payroll expenses including employees. To support his claims of high payroll expenses, Benlevi submitted made-up documentation that detailed each of his companies had an annual payroll expense of $4.8 million.

After submitting his applications and supporting documents, three of Benlevi’s companies, 1Stellar Health LLC, Bestways2 Health LLC, and Joyous-Health4U LLC were issued $3 million in PPP funds. The money was deposited into the accounts of these companies only for Benlevi to later transfer the funds out of those accounts and into personal and other business accounts.

Despite having detailed that the PPP funds would be used for these non-existent business expenses, Benlevi instead used the money to fund his lifestyle. Officials detail that on one day, Benlevi withdrew $248,000 using cashier's checks from one of his business accounts. Benlevi then used that money to pay off personal expenses including credit card debt and rent payments for an oceanfront apartment in Santa Monica.

In the indictment, officials detail that Benlevi was convicted of bank fraud, false statements to a financial institution, and money laundering. He is scheduled for sentencing on June 27th.

Benlevi’s actions account for just a sliver of over $80 billion lost to fraud through the Paycheck Protection Program. Officials detail that about 10% of the program's funding has been fraudulently obtained by those looking to score easy money. As a result of the massive misuse of taxpayer dollars, in early March, the Justice Department named Kevin Chambers as chief prosecutor for COVID-19 fraud. As part of his duties, Chambers seeks to go after major perpetrators who were able to obtain substantial sums of money through the PPP.