A Brockton man, Joao Mendes, 60, is now facing up to 20 years in prison after pleading guilty to wire fraud for cheating COVID-relief funds out of more than $1.5 million. According to a statement from the U.S. Attorney's Office, Mendes admitted in Boston federal court to submitting multiple fraudulent loan applications for the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL).
From about June to September 2020, Mendes's fraudulent claims involved inflating the number of employees and payroll expenses for his businesses, as well as providing false tax records. On the EIDL applications, he falsified the number of employees, gross revenues, and costs of goods sold. These nefarious activities led to Mendes and his accomplices receiving a hefty sum, which he spent on personal expenditures, including purchasing cryptocurrency, or shuffled between various accounts he controlled.
Federal authorities have seized assets connected to Mendes, clawing back $1.545 million in cryptocurrency and over $206,000 in U.S. currency, all of which is subject to criminal forfeiture. His sentencing is slated for April 9, 2024, with potential penalties including a maximum two-decade prison sentence, up to three years of supervised release, and a fine of up to $250,000 or twice the gross gain from his offense.
The CARES Act, legislated in March 2020, was intend to provide prompt financial aid to Americans reeling from the pandemic's economic strain. The PPP and EIDL were components of this relief effort, offering forgivable loans to small businesses for sustaining employment and certified expenses. The fallout of schemes like Mendes's affronts the very purpose of these lifelines – to support establishments wrestling to keep their doors open during uncertain times.
This case is bolstered by the COVID-19 Fraud Enforcement Task Force, established in May 2021 by the Attorney General. This body unifies the Department of Justice's efforts with other government agencies to preclude and chase down pandemic-related fraud. For those looking to report fraud related to COVID-19, the Department of Justice encourages reaching out through the National Center for Disaster Fraud (NCDF) Hotline or using the NCDF Web Complaint Form.
