An Encino man was convicted by a federal jury Monday in a $27 million COVID-19 relief funds fraud scheme.
Robert Benlevi, 53, was convicted for submitting fraudulent applications seeking money from the Paycheck Protection Program (PPP), submitting false statements to a financial institution, and money laundering, the Department of Justice said in a news release Tuesday.
Benlevi submitted 27 PPP loan applications to four banks between April and June 2020 on behalf of eight companies solely owned by him, according to court documents and evidence presented at trial.
In the applications, Benlevi sought a total of $27 million in forgivable PPP loans guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the DOJ said.
In his fraudulent applications, Benlevi represented that each of his companies had 100 employees and average monthly payroll of $400,000, even though he knew that the companies did not have any employees or payroll expenses, according to the department.
He also submitted fabricated IRS documents falsely stating that each of the companies had an annual payroll of $4,800,000, the DOJ added.
Based on Benlevi’s fraudulent loan applications, three of his companies — 1Stellar Health LLC, Bestways2 Health LLC and Joyous-Health4U LLC — obtained $3 million in PPP funds.
Although Benlevi falsely represented that the funds would be used for payroll and other business expenses, he instead used them for personal expenses, including cash withdrawals, payments on his personal credit cards, transfers to other personal and business accounts he controlled, and renting an oceanfront apartment in Santa Monica, the DOJ said.
In a single day, Benlevi withdrew $248,000 of PPP funds in cashier’s checks from the Bestways2 Health account, and deposited the money into other accounts he controlled.
Benlevi was convicted of bank fraud, false statements to a financial institution, and money laundering.
He is scheduled to be sentenced on June 27 and faces a maximum penalty of 30 years in prison.