Go Big or Go Home: Small Covid-19 Loans Denied, Man Asked for $2.5M Loan, Got It; now he faces federal charges
A former Saugus resident who now lives in Boca Raton, Fla., got a $2.5 million Payroll Protection Plan loan through a scam app and used the money to buy cars, news home and buy cryptocurrency, rather than supporting the 154 employees he didn’t actually have, the US attorney’s office in Boston charges.
Vinicius Santana, 34, was arrested Monday at Miami International Airport for wire fraud, the U.S. Attorney’s Office reports. He was sentenced to flight risk at least until he was flown to Boston for an arraignment and bail hearing, court records show.
Santana, who ran a paint business called Complete Home Care while still in Massachusetts, originally applied for a $25,000 PPP loan on April 10, 2020 based on having five employees and a monthly payroll of $10,000, as part of the federal program to help small businesses retain employees as Covid-19 devastated the economy. But his lender, called Lendio, denied the request, according to an affidavit from an FDIC investigator into the matter. About two weeks later, he submitted two new claims, this time for $45,000, based on the same five employees but now claiming a monthly payroll of $18,000. Lendio again rejected his applications.
On the same day he was rejected for the $45,000 loans, the affidavit continues, Santana submitted a fourth request to Lendio. This time, he claimed to have 154 employees and a monthly payroll of $1 million.
On May 11, 2020, Northeast Bank, to whom Lendio forwarded his request, wired $2.5 million to Santana’s account at East Boston Savings Bank — an account authorities say Santana had only opened a week earlier.
But that was based on a fraudulent federal tax form he never actually submitted to the IRS, the affidavit says, adding that tax and other records show Santana never employed more than the five people. which he had originally requested.
Instead of using the PPP funds for payroll, mortgage payments, or utilities, Santana spent the PPP funds on personal expenses, such as cars and cryptocurrencies, and sent money to businesses and individuals who were unrelated to CHC’s payroll.
This included transferring more than $1.3 million to his account at Kraken, a cryptocurrency exchange site, and spending $90,000 on a new Audi at a Burlington dealership, as well as transferring money to businesses he had started years earlier — money that was later withdrawn via checks at a check cashing location in Marlboro, the affidavit states.
According to the U.S. Attorney’s Office:
The wire fraud charge carries a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000, or double the gross gain or loss of the scheme, whichever is greater. raised. Sentences are imposed by a federal district court judge based on US sentencing guidelines and the laws that govern sentencing in a criminal case.