United States Attorney Roger B. Handberg announces the results achieved to date by the Middle District of Florida’s efforts to combat fraud related to COVID-19. Those efforts have included complementary actions by the Criminal, Asset Recovery, and Civil Divisions, along with federal, state, and local law enforcement agencies.
“Throughout the pandemic, my office and our law-enforcement partners have used all available methods to combat fraud related to COVID-19, and we will continue to do so,” stated U.S. Attorney Handberg. “After the United States instituted multiple programs to financially assist those most harmed by the pandemic, criminals sought to defraud those programs for personal enrichment at the expense of the taxpayers who funded these programs. We will continue to disrupt these fraud schemes, prosecute those who commit crimes, and return ill-gotten gains through our efforts.”
On the criminal-enforcement front, the United States Attorney’s Office and federal, state, and local law enforcement agencies joined together in March 2020 to form the Middle District of Florida COVID-19 Fraud Task Force to identify, investigate, and prosecute fraud related to the ongoing COVID-19 pandemic. Since its inception, the Task Force has prosecuted 28 defendants for fraud schemes designed to exploit federal programs created or expanded to address the COVID-19 pandemic, including the Paycheck Protection Program (“PPP”), Economic Injury Disaster Loans (“EIDL”), Unemployment Insurance (“UI”), and the Main Street Lending Program (“MSLP”). These defendants collectively sought to defraud the United States of over $35 million. Eighteen of those defendants have already been found guilty, while prosecution remains pending against ten defendants. (See chart for criminal case details.)
Further, the District’s Asset Recovery Division and federal seizing agencies have completed the forfeiture of more than $14.3 million of PPP, EIDL, and UI funds that were fraudulently obtained, depriving the fraudsters of their ill-gotten gains and recovering the proceeds for the victims. More than $8.5 million in additional pandemic fraud proceeds have been seized and are pending civil or criminal forfeiture.
For example, in May 2020, Don Cisternino obtained a $7.2 million PPP loan for a non-existent movie production company. Cisternino used almost $3.5 million of the PPP loan proceeds to buy a 12,579 square foot luxury home with seven bedrooms, 11 bathrooms, a four-car garage, theater room, resort-style pool and spa area, tennis courts, and a 5-stall horse barn, on more than twelve acres, pictured below.
The United States completed a civil forfeiture of the lavish home, selling it earlier this year for more than $4 million, which will be returned to the victim. Cisternino has been indicted in Orlando and was arraigned on April 29, 2022, after being successfully extradited from Croatia. The Justice Department’s Office of International Affairs provided valuable assistance in securing Cisternino’s arrest and extradition.
Similarly, in April 2020, Casey Crowther obtained a $2.1 million PPP loan by falsely stating that he intended to use the money for his roofing company. However, Crowther quickly used the proceeds for personal purchases, including nearly $700,000 for a 40’ catamaran boat, pictured below.
Crowther was convicted following a trial in Fort Myers, and in June 2021, he was sentenced to over three years in federal prison and was ordered to forfeit the boat and over $3 million.
The District’s Civil Division has similarly combatted fraud related to COVID-19 through its enforcement efforts. For example, in the summer of 2020, consumers complained about websites that were falsely claiming to sell personal protection equipment for the COVID-19 virus. Agents from Homeland Security Investigations identified three men in Vietnam who were using hundreds of web pages to steal money from consumers seeking to purchase PPE. The Civil Division and the agents together halted the payments from U.S. purchasers and obtained a permanent restraining order blocking the websites from being hosted by a U.S. company. The men are now in custody in Vietnam and are facing criminal charges there.
Further, as a result of the efforts of the Civil Division, a Tampa pain management practice, Physician Partners of America, and its affiliated companies, paid a $1.3 million penalty under the Financial Institutions Reform, Recovery, and Enforcement Act as part of a larger civil settlement, to resolve our claim that the defendants improperly applied for a PPP loan of over $5.9 million while engaged in unlawful Medicare overbilling. Similarly, in two recent bankruptcy proceedings handled by the Civil Division, debtors were required to return PPP loans totaling almost $2 million because the United States objected to their obtaining the loans while also seeking bankruptcy protections.
The Attorney General has established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Through the PPP, the federal government authorized over $600 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. The EIDL program provides economic relief to small businesses that are currently experiencing a temporary loss of revenue. The MSLP provided support to small and medium-sized businesses and their employees across the United States during the COVID-19 pandemic. UI programs provided unemployment benefits to eligible workers who became unemployed through no fault of their own.
The criminal cases identified in the linked chart have been investigated by the Federal Bureau of Investigation, United States Secret Service, Internal Revenue Service—Criminal Investigation, Department of Labor—Office of Inspector General, U.S. Postal Service, Federal Housing Finance Agency, Small Business Administration, Federal Deposit Insurance Corporation—Office of Inspector General, Bureau of Alcohol, Tobacco and Firearms, Metropolitan Bureau of Investigation, the Tampa Police Department, the Orlando Police Department, and the Orange County Sheriff’s Office. The cases are being prosecuted by Assistant United States Attorneys throughout the Middle District of Florida.
The Department of Justice needs the public’s assistance in remaining vigilant and reporting suspected fraudulent activity. To report suspected fraud, contact the National Center for Disaster Fraud (NCDF) at (866) 720-5721 or file an online complaint at: https://www.justice.gov/disaster-fraud/webform/ncdf-disaster-complaint-form. Complaints filed will be reviewed at the NCDF and referred to federal, state, local, or international law enforcement or regulatory agencies for investigation.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
Original source can be found here.