PPP Attorney – Criminal Defense Lawyers PLLC

Keith William Nicoletta, 48, of Dade City, Florida faces federal charges for fraudulently obtaining more than $1.9 million in Paycheck Protection Program (PPP) funds and using the emergency aid for unauthorized expenses, including to purchase a new Mercedes and Ford F-250 pickup truck. Nicoletta was arrested earlier this week, according to a criminal complaint unsealed by U.S. Attorney Maria Chapa Lopez on October 23, and, if convicted, could serve up to 40 years in federal prison. The charges against Nicoletta include bank fraud and illegal monetary transactions, and the case is being investigated by the Federal Bureau of Investigation (FBI) and the Internal Revenue Service (IRS) – Criminal Investigation unit, Tampa Field Office and prosecuted by Assistant U.S. Attorney Kristen A. Fiore.

Federal Pandemic Relief Fraud Cases

The federal government is making a concerted effort to root out fraud associated with the Paycheck Protection Program and make an example of offenders, and Keith Nicoletta’s PPP fraud case is one of dozens of pandemic relief fraud cases that have been taken on by the Department of Justice. To date, more than 57 people have been charged with fraudulently obtaining $175 million in PPP funds and/or using the funds for personal purchases or other unauthorized purposes.

In this latest PPP fraud case, Keith William Nicoletta is accused of committing bank fraud and engaging in illegal monetary transactions involving PPP funds he obtained through fraud. According to a news release issued by the U.S. Attorney’s Office for the Middle District of Florida on October 23, Nicoletta fraudulently obtained emergency PPP funds in May 2020, after falsely claiming on his PPP loan application that he had a local scrap metal business with 69 employees and monthly payroll expenses exceeding $760,000, or more than $9 million annually. In truth, Nicoletta did not report any wages to the state of Florida for any employees in 2020 or 2019.

Upon securing the PPP funds through fraudulent means, rather than using the money for payroll costs and legitimate business expenses as required by the Paycheck Protection Program, Nicoletta laundered the money, transferring it between various accounts at different financial institutions, authorities allege. He then withdrew more than $100,000 in cash and bought a 2020 Mercedes for more than $106,000 and a 2020 special edition Ford F-250 pickup truck for more than $66,000. Nicoletta also wired $537,000 to a property management company located in south Florida.

Defendants Allegedly Used PPP Funds for Personal Purchases

“We allege that many of these defendants took the relief money offered by the PPP program and spent it on things having absolutely nothing to do with relief – often on luxury items for themselves, their families, and their friends such as cars, jewelry, travel, and other personal expenses,” stated Acting Assistant Attorney General Brian Rabbitt at the PPP Criminal Fraud Enforcement Action Press Conference in September. “Unfortunately, almost every crisis brings out not only those who seek to help others, but also those who try to exploit the situation for their own unlawful purposes and financial gain.” A major concern during the ongoing COVID-19 crisis has been the high number of cases of CARES Act fraud, and these types of cases continue to roll in, as the federal government takes aim at a wide variety of fraudulent schemes. These include making false representations in PPP loan applications, using stolen PPP funds for unauthorized purposes, stealing taxpayer money, and ensuring that less money was available in the PPP program for legitimate businesses in genuine need of financial support during COVID-19.

Emergency Paycheck Protection Program Funds

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law that was enacted in March 2020, to provide emergency financial assistance to millions of Americans experiencing economic hardship as a result of the unprecedented coronavirus pandemic. The centerpiece of the CARES Act was the Paycheck Protection Program, a loan program regulated by the Small Business Administration, meant to provide much-needed relief to qualifying small businesses and other organizations struggling to stay afloat during COVID-19. The SBA-backed loans distributed under the PPP program were intended to prevent massive layoffs and unemployment during the coronavirus crisis by helping businesses retain their employees and cover payroll and other authorized business expenses, such as mortgage and rent payments.

Under the PPP program, emergency funds were available to qualifying small businesses with 500 or fewer employees, including sole proprietorships, independent contractors, gig workers and self-employed individuals. Launched in April 2020, the PPP program initially provided up to $349 billion in potentially forgivable loans to small businesses hard hit by the coronavirus pandemic. In April 2020, Congress authorized more than $300 billion in additional funding for the PPP program, and by the time the program was closed to new applications in August, more than 5.2 million loans had been approved by the federal government for a total of more than $525 billion in emergency financial relief. The loans distributed under the PPP program have a maturity of two years and an interest rate of 1%, with no collateral or personal guarantees required.

Justice Department Moving Aggressively to Prosecute Offenders

One key requirement of the PPP program is that businesses receiving financial assistance must use the funds for payroll costs, interest on mortgages, rent and lease payments, and utilities. What makes the PPP program even more attractive is the fact that the loan can be 100% forgiven so long as the business spends the funds on authorized business expenses within a set time period and uses at least a certain percentage of the funds to retain its employees and fund payroll. These favorable terms made the PPP program a target for those who sought to abuse the program by committing fraud, which the federal government immediately moved to squash. Within months of the Paycheck Protection Program being announced, the Department of Justice brought its first charges of fraud in connection with the CARES Act and promised to devote extensive law enforcement resources to aggressively investigate and prosecute those who abused the PPP program and stole or attempted to steal taxpayer money.

“Early on, Attorney General Barr recognized that the pandemic would present fraudsters and other bad actors with a unique opportunity to take advantage of the crisis, and he directed the Department of Justice to take swift action to protect law-abiding Americans,” stated Rabbitt at the PPP Criminal Fraud Enforcement Action Press Conference. “We did this not only to protect the integrity of the PPP and the taxpayer funds it was disbursing, but also to send a message of deterrence to would-be fraudsters – while loans were still being made – that the Department was standing watch and would move aggressively to prosecute those who defrauded this critical program.”

Feds Launch Dozens of PPP Fraud Investigations Across U.S.

Over the past several months, there has been a wave of PPP fraud investigations initiated by the federal government, which has taken swift and immediate action to combat fraud tied to the Paycheck Protection Program, with the help of the FBI, the IRS and the SBA’s Office of the Inspector General, among other federal agencies. “Our cases are diverse in size and scope, involving fraud ranging from loan requests for just $30,000 to approximately $24 million,” said Rabbitt. The Department of Justice says that the PPP fraud cases they are investigating fall into two general categories. The first category involves individuals or small groups who lied about having small businesses or needing emergency PPP funds to pay their employees, and then used the funds to buy things for themselves. “As we allege in our charging documents, these defendants used lies to obtain millions of dollars in PPP funds and then spent those funds on things like luxury cars, homes, renovations, jewelry – and even adult entertainment and gambling in Las Vegas,” said Rabbitt. The second category of PPP fraud cases involves criminal rings that organized coordinated, systematic efforts to defraud the PPP program on a massive scale.

IRS Special Agent in Charge: PPP Loan Fraud “Will Never Be Tolerated”

Nicoletta is at least the second person in the region to face federal charges for fraud in connection with the Paycheck Protection Program. In early September, Casey David Crowther of Fort Myers, Florida, president of Target Roofing & Sheet Metal Inc., was charged with spending federal COVID-19 relief funds on personal purchases, including the purchase of 40-foot catamaran valued at nearly $700,000. According to the criminal complaint, which was unsealed last month, Crowther fraudulently applied for and secured a PPP loan in the amount of $2,098,700.

With billions of taxpayer dollars and the fate of troubled small businesses at stake, the Department of Justice has made good on its promise to aggressively pursue anyone attempting to use the COVID-19 crisis as an opportunity to commit fraud, criminally charging more than 57 people alleged to have defrauded the Paycheck Protection Program this year. “During these difficult times, while hardworking American citizens are facing a pandemic and struggling to take care of their families, crimes like these literally rob the coffers of critically needed relief funds,” said Special Agent in Charge Michael J. De Palma of the IRS Criminal Investigation unit, Miami Field Office, in a Department of Justice press release issued in August. “We will continue to tirelessly pursue the culprits behind these heinous schemes and bring them to justice. Any fraud of COVID-19 financial relief programs will never be tolerated.”

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