Law enforcement gains ground in attacking PPP fraud cases

Facebook videos in hotel rooms strewn with $100 bills and luxury handbags. A brand new Mercedes. A $700,000, 40-foot catamaran.

That’s not a scene from lifestyles of the rich and famous. Instead, it’s the alleged lives of up to four people in the region charged in federal cases alleging PPP loan fraud and other misuse of government-backed COVID-19 loan programs. The cases, going back to September, include one jury conviction and one guilty plea so far.  

The cases also mirror the national scene, where the U.S. Justice Department, in a late March statement, released an update on criminal and civil enforcement efforts to combat COVID-19 related fraud. It includes schemes targeting PPP loans and the Economic Injury Disaster Loan (EIDL) program. Through March 26, officials in 56 federal districts have publicly charged 474 defendants with criminal offenses based on alleged COVID-19 loan fraud schemes worth more than $569 million.

The latest alleged fraud in the Middle District of Florida, based in Tampa and including Polk through Collier counties, is from an April 2 criminal complaint. In that case, a Polk County couple — Julio Lugo, 44, and Rosenide Venant, 37, both of Davenport — was charged with conspiracy and making false statements to a financial institution.

Authorities contend Lugo and Venant created at least 70 false loan applications seeking $5.8 million in both PPP and EIDL funds. They then allegedly used some of the funds to pay off a luxury car, gamble at least $62,000 at a casino and withdraw at least $320,000 in cash. “Lugo publicized the misuse of the SBA funds in a Facebook video featuring a hotel room littered with $100 bills and at least $5,000 in merchandise from Louis Vuitton,” says a statement from Middle District of Florida Acting U.S. Attorney Karin Hoppmann

The charges against Lugo and Venant follow two other cases in the area:

• Keith Nicoletta, 48, of Dade City, pleaded guilty to conspiracy to launder stolen COVID-19 relief funds Jan. 28. Officials contended Nicoletta’s fraudulent PPP loan application claimed his Pasco County business had 69 employees with a purported monthly payroll exceeding $760,000 — or more than $9 million annually. “In fact, the business had no employees and its address was actually Nicoletta’s home,” a release in the case stated. In the plea agreement, Nicoletta agreed to forfeit more than $1.9 million and a 2020 Mercedes and a 2020 Ford F-250 truck he bought with the funds. He hasn’t been sentenced yet.

• A federal jury convicted Fort Myers-based Target Roofing & Sheet Metal President Casey David Crowther March 26 in a PPP loan fraud case. Crowther, 35, of Fort Myers, was convicted of bank fraud, making a false statement to a lending institution and two counts of money laundering.

According to trial evidence, Crowther obtained a $2.1 million PPP loan by falsely stating he would use the money to pay payroll, rent and utilities for the company. Yet Crowther, authorities contended, “intended to use the money to enrich himself and, once the loan was obtained, quickly used the proceeds to make a series of personal purchases.” That included a 2020 40-foot Invincible Catamaran bought for  $689,417. Crowther hasn’t been sentenced yet.