Somerset County woman charged with $1million paycheck protection scheme and economic injury loan fraud scheme | USAO-NJ
NEWARK, NJ — A Somerset County, New Jersey woman has been charged with fraudulently obtaining over $1 million in Federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) loans, the US said -Attorney Philip R. Sellinger known today.
Nivah Garcis, 51, of North Plainfield, New Jersey, faces a complaint alleging bank fraud and money laundering. She appeared before US Judge Edward S. Kiel via videoconference for the first time today and was released on $100,000 unsecured bail.
According to the documents and testimonies filed in court in this case:
Garcis submitted two fraudulent PPP loan applications to a lender on behalf of two alleged companies and three fraudulent EIDL loan applications to the Small Business Administration (SBA) on behalf of three alleged companies.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020, designed to provide emergency financial assistance to millions of Americans suffering the economic impact of the COVID-19 pandemic. One source of relief from the CARES Act was the approval of up to $349 billion in forgivable small business loans for job preservation and certain other expenditures through the PPP. In April 2020, Congress approved over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to obtain loans with a two-year term and an interest rate of 1 percent. Proceeds from PPP loans must be used by businesses for payroll costs, mortgage interest, rent and utilities. The PPP allows for forgiveness of the interest and principal of the PPP loan if the entity spends the loan proceeds on those expense items within a specified period of time after receiving the proceeds and uses at least a specified percentage of the PPP loan proceeds for payroll costs.
The applications filed by Garcis allegedly contained fraudulent allegations against the lender – a member of the Federal Home Loan Bank – and the SBA, including fake federal tax documents purportedly from the IRS. Garcis also fabricated the existence of employees and wages paid by the alleged companies. However, according to IRS records, none of the alleged tax documents Garcis filed in support of her loan applications were actually filed with the IRS. Based on Garcis’ alleged misrepresentations, her loan applications for her alleged businesses were approved for approximately $1.05 million in federal COVID-19 emergency relief funds intended for ailing small businesses. Garcis then used the proceeds for various personal expenses, including a BMW SUV.
The bank fraud charge carries a maximum sentence of 30 years in prison and a $1 million fine. The money laundering charge carries a potential maximum sentence of 10 years in prison and a maximum fine of $250,000 or twice the gross profit for the defendant or the gross loss for the victim, whichever is greater.
US Attorney Sellinger attributed Special Agents of the Social Security Administration, Office of the Inspector General, led by Special Agent in Charge Sharon MacDermott; Special Agents of IRS – Criminal Investigation, led by Special Agent in Charge Michael Montanez; Special Agents for the United States Attorney for the District of New Jersey, led by Special Agent in Charge Thomas Mahoney; US Postal Inspection Service postal inspectors headed by Acting Inspector Raimundo Marrero; Federal Housing Finance Agency Special Agents, Office of Inspector General, led by Special Agent in Charge Robert Manchak; Special Agents of the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Acting Special Agent in Charge Stephen Donnelly; Federal Deposit Insurance Corporation Special Agents – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and Department of Homeland Security special agents, Homeland Security Investigations, led by Jason J. Molina in Newark, which investigations led to the indictments.
The government is being represented by Assistant US Attorneys Katherine M. Romano and David E. Dauenheimer of the US Attorney’s Office in Newark’s Government Fraud Division.
Anyone with information about suspected fraud related to COVID-19 may report it by calling the Department of Justice’s National Center for Disaster Fraud hotline at 866-720-5721 or the NCDF web complaint form at: https:/ /www.justice. gov/disaster-fraud/ncdf-disaster-complaint-form.
The allegations and allegations contained in the Complaint are allegations only and the accused shall be presumed innocent until proven guilty.