An Ontario man, Justin Konikow, 38, was arrested on charges of wire fraud for allegedly defrauding the government out of over $800,000 in COVID-19 relief funds, a complaint from federal prosecutors revealed. Konikow, who concealed his criminal history to secure the loans, is expected to make his initial court appearance in downtown Los Angeles, according to a statement obtained by the U.S. Attorney’s Office for the Central District of California.
Filed with the complaint, an affidavit explains how Konikow applied for an Economic Injury Disaster Loan (EIDL) in April 2020, which was designed to help small businesses during the pandemic. His application listed him as the sole owner of a business named "Trendsetters." Despite certifying under penalty of perjury that neither he nor the business had ever been criminally charged, Konikow was previously convicted of mail fraud in January 2020 for a scheme that swindled the government out of a good quarter-million dollars using fake identities.
By approving the EIDL and subsequent increases to the loan amount requested through modifications, the Small Business Administration (SBA) sent approximately $805,000 to Konikow's bank account. As detailed by the Department of Justice, he then moved the money quickly, settling credit card debts, making car payments, and transferring about $47,000 to a stock trading account with Robinhood.
In the face of the charges, all defendants carry the presumption of innocence until proven guilty. If convicted, Konikow could face up to 20 years in federal prison, outlining the severity of the misused COVID funds is. Assistant United States Attorney Gregg Marmaro of the Major Frauds Section is the one prosecuting this case. The matter is being investigated by the SBA’s Office of Inspector General.
Authorities encourage the public to report any suspected COVID-19-related fraud. Individuals can contact the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or use the NCDF Web Complaint Form available online for reporting such fraudulent activities.
