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Brockton man admits he fraudulently obtained $1.5 million in Covid-19 relief funds, much of which he used to buy cryptocurrency

A Brockton man who claimed a total of 60 employees spread among companies he allegedly ran in Massachusetts, Wyoming and Alaska was charged with wire fraud today in Boston federal court - and promptly agreed to plead guilty.

Joao Mendes, 59, and a couple of as yet uncharged accomplices submitted a variety of applications in 2020 for an existing SBA fund and a Covid-19 specific fund in 2020 for companies and employees that did not exist, according to an "information" filed in US District Court.

According to the document, Mendes then used the money not to support the companies and employees who didn't exist, but to play the cryptocurrency market. The feds are seeking to freeze his accounts on a variety of crypto exchanges to try to extract whatever value they have left to reimburse the government.

Mendes proved a persistent fund seeker: When the SBA rejected one of his applications for money under the SBA's Economic Injury Disaster Loan Program, he would seek money under the separate Paycheck Protection Program. When one of the third-party loan arrangers handling PPP applications rejected his PPP application, he'd file with another company. It worked - at least, initially:

On or about June 23, 2020, MENDES submitted a false and misleading EIDL application to the SBA in the name of World Trade (the "World Trade EIDL Application"). MENDES certified that the application and the information provided in all supporting documents and forms was true and accurate.

The World Trade EIDL Application falsely claimed that World Trade had ten employees, $3,200,000 in gross revenues, and $2,000,000 in cost of goods sold for the twelve months prior to the COVID-19 pandemic. The SBA denied the World Trade EIDL Application on or about June 23, 2020.

On or about June 25, 2020, MENDES submitted a false and misleading PPP application to Fundbox in the name of World Trade (the "Fundbox World Trade Application"). MENDES signed the application and certified that the application and the information provided in all supporting documents and forms was true and accurate.

The Fundbox World Trade Application falsely claimed ten employees and $58,828 in average monthly payroll. In addition, MENDES submitted with the Fundbox World Trade Application purported 2019 IRS tax forms including a Form 944 and a Schedule C claiming $1,332,691.45 in gross receipts or sales.

Fundbox approved the Fundbox World Trade Application. On or about June 29, 2020, PPP loan funds in the amount of $167,905 were deposited into the MENDES Citibank Account.

The US Attorney's office reports a sentencing hearing has yet to be scheduled.

Free tagging: 
PDF icon Complete federal charging document225.42 KB

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Invested it in crypto! In the good old days he would have blown it at the track, or spent it all on whores and whiskey. Back then you could get value for your money.