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Published on April 11, 2024
Brockton Man Sentenced to 27 Months for Defrauding COVID Relief Programs of $1.5 MillionSource: Unsplash/ Celyn Kang

A 60-year-old Brockton man has been put behind bars for bilking over $1.5 million meant for pandemic-struck businesses, federal authorities reported. Joao Mendes was sentenced to a 27-month prison term followed by one year of supervised release after pleading guilty to wire fraud for swindling Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) funds, as per the U.S. Attorney's Office in Massachusetts.

Investigators found that from June to September 2020, Mendes forged applications with erroneous details, such as employee numbers and monthly payroll estimates for defunct businesses, managing to secure hefty loans despite submitting these applications with conflicting information, the feds charged. Along with sentencing, Judge Nathaniel M. Gorton ordered Mendes to pay $1,542,759 in restitution and forfeit assets worth $1,751,694 according to the U.S. Attorney's Office announcement.

Mendes didn't just falsify numbers for show; he went so far as to indulge in the purchase of cryptocurrency with the ill-gotten gains, which underscored the personal benefit he derived rather than supporting any legitimate business during the rough economic tide that the COVID-19 pandemic had unleashed. Authorities succeeded in seizing a combination of cryptocurrency and fiat currency from over 20 accounts, recovering roughly $1.545 million in digital assets and more than $206,000 in U.S. currency for criminal forfeiture, according to the announcement on the U.S. Attorney's Office website.

The CARES Act, passed in March 2020, was meant to help struggling Americans, including small businesses hit hard by the pandemic. But cases like Mendes's show how some people exploit these programs. In addition to the CARES Act, the American Rescue Plan Act created the Restaurant Revitalization Fund (RRF), which gives forgivable loans to restaurants and related businesses to help them survive these tough times, according to federal authorities.

To fight pandemic fraud, the government created the COVID-19 Fraud Enforcement Task Force in May 2021. They gather experts from different agencies to catch and punish people scamming relief programs. If you want to know more about what the government is doing to stop these scams, you can visit the Justice Department's special webpage about coronavirus response.