San Diego businessman Thomas Zolezzi pled guilty to COVID-19 related fraud today. As per the United States Department of Justice, Zolezzi fraudulently obtained close to $3 million through providing fraudulent information on five pandemic-associated loan applications.
Zolezzi exploited the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL), relief programs established under the CARES Act. These programs were designed to provide relief to those economically impacted by the COVID-19 virus. Despite these programs having assisted many, Zolezzi's case demonstrates their vulnerability to fraud.
Zolezzi admitted that he submitted loan applications, which inflated the number of his employees, his payroll cost, and his annual revenue. This allowed him, from May 2020 onwards, to secure almost $3 million in loans. Rather than using these funds for his business or workforce, Zolezzi used them for personal costs. In his plea agreement, he has committed to paying over $2.9 million in restitution to both the Small Business Administration (SBA) and Capital Plus Financial.
Government agencies remain dedicated to investigating and prosecuting those who misuse relief funds. A notable initiative is the COVID-19 Fraud Enforcement Task Force, launched by the Attorney General on May 17, 2021. The task force seeks to enhance governmental capacity to deter and detect pandemic-related fraud while safeguarding program administration.
Zolezzi is scheduled for sentencing on February 5, 2024.
