Bernard Lopez, from Sayreville, N.J, was sentenced to two years in prison this week after pleading guilty in July to Covid relief fraud. The N.J. man was charged with stealing over $400K in government money meant to help struggling small businesses through the Covid-19 pandemic.
According to court reports, Lopez was charged with one count of bank theft and one count of theft of government funds. U.S. District Judge Peter G. Sheridan sentenced him to 30 months in prison.
The N.J man’s bank fraud started before the pandemic when he got a fraudulent social security number and used it to open up a fake bank account for a fake business. According to Lopez, his business had 25 employees with a payroll of $200,000. After setting up the bank account, he deposited Covid funds and used the money for personal gain.
Lopez also applied for the Paycheck Protection Program, which was set up during the Covid-19 pandemic to help small businesses cover payroll and other expenses. As long as the business spent the loan on payroll costs, rent, and utilities they were not required to pay the money back.
Court documents revealed that “Lopez devised a scheme to commit bank fraud through which a stolen and altered U.S. Treasury check was deposited into a corporate bank account Lopez created in the name of Pezlo Management LLC.” The documents pointed out that “the check was altered to be made payable to Pezlo in the amount of $211,886 and was then deposited into Pezlo’s corporate bank account. Lopez later withdrew or transferred the stolen proceeds from Pezlo’s bank account before the bank could detect the fraud.”
Bernard Lopez also admitted to altering the number on a U.S. Treasury check from $1,886.87 to $211,886.87. He deposited the check to start his fraudulent business and fund his personal expenses.
The Middlesex County man was arrested back in July. Officers found him in Florida and he was later taken back to New Jersey to face trial. Along with his prison sentence, Lopez must forfeiture the $481,502 and pay back $137,000 in restitution.
This is not the first case of Covid relief fraud this year. Since the Covid-19 pandemic, many people have used PPP loans to fund their personal expenses instead of helping small businesses.
On Nov. 17, Richard Ayvazyan and Marietta Terabelian were sentenced to prison for their Covid relief fraud scheme. The husband and wife were sentenced in absentia because they were considered fugitives after they cut their tracking anklets and disappeared. The couple is still wanted by the FBI.
Ayvazyan received 17 years in prison while his wife received six years. The couple has three teenage children whom they abandoned when they disappeared.
According to court reports, Ayvazyan, Terabelian, and Ayvazyan’s brother, all used fake identities, including those belonging to the elderly and the dead, to apply to over 150 different Covid relief loans.
The trio stole over $18 million before they were discovered. U.S. Attorney Tracy L. Wilkison said that “the defendants used the Covid-19 crisis to steal millions of dollars in much-needed government aid intended for people and businesses suffering from the economic effects of the worst pandemic in a century.”
Like Bernard Lopez, the couple used stolen money to fund lavish lifestyles. They bought luxury purses, gold coins, and luxury homes in California. They even bought diamonds and a Harley Davidson motorcycle.
During their trial, they were asked to hand over all the items purchased with stolen money along with $450,000 left in their bank accounts.
It’s still unclear how much money was stolen in 2020 due to Covid relief fraud. West Virginia recently released a statement revealing that WorkForce West Virginia paid over $83 million in fraudulent unemployment claims during 2020. $800K of that money was paid out of the state’s unemployment trust fund and the state has no way of getting the money back.
“WorkForce was faced with an unprecedented number of unemployment claims,” the statement read. “The agency did not have sufficient administrative capacity, technology, fraud prevention, and improper payment detection to properly process the large volume of claims from both unemployment programs. Other states also experienced similar fraudulent activity in their unemployment insurance programs.”