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Go big or go home: Denied small Covid-19 loans, man applied for $2.5 million loan, which he got; now he faces federal charges

A former Saugus resident who now lives in Boca Raton, FL got a $2.5 million Payroll Protection Plan loan through a fraudulent application and used the money on cars, a new house and buying cryptocurrency, rather than supporting the 154 employees he didn't actually have, the US Attorney's office in Boston charges.

Vinicius Santana, 34, was arrested at Miami International Airport on Monday on a charge of wire fraud, the US Attorney's office reports. He was ordered held as a flight risk at least until after he is flown to Boston for arraignment and bail hearing, court records show.

Santana, who ran a painting concern called Complete Home Care while still in Massachusetts, initially applied for a $25,000 PPP loan on April 10, 2020 based on having five employees and a monthly payroll of $10,000, under the federal program aimed at helping small businesses retain employees as Covid-19 devastated the economy. But his lender, called Lendio, rejected the application, according to an affidavit by an FDIC investigator on the case. About two weeks later, he submitted two new applications, this time for $45,000, based on the same five employees but now claiming a monthly payroll of $18,000. Lendio rejected his applications again.

The same day he was rejected for the $45,000 loans, the affidavit continues, Santana submitted a fourth application to Lendio. This time, he claimed to have 154 employees and a monthly payroll of $1 million.

On May 11, 2020, Northeast Bank, to which Lendio forwarded his application, wired $2.5 million to Santana's account at the East Boston Savings Bank - an account the feds say Santana had only opened a week earlier.

But that was based on a fraudulent federal tax form that, in fact, he had never submitted to the IRS, the affidavit states, adding that tax and other records show Santana never actually employed more than the five people he initially claimed.

Instead of using the PPP funds for payroll, mortgage payments, or utilities, Santana spent the PPP funds on personal expenses, such as cars and cryptocurrency, and sent money to businesses and individuals that were not related to CHC’s payroll.

This included transferring more than $1.3 million to his account at Kraken, a cryptocurrency trading site, and spending $90,000 on a new Audi at a Burlington dealership, as well as wiring money to companies he had set up years earlier - money that was then withdrawn via checks at a check cashing place in Marlboro, the affidavit states.

According to the US Attorney's office:

The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss from the scheme, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

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Comments

Real story here is that they wouldn’t help a small business but as soon they thought it was a million dollar company they did. Tom Brady probably didn’t need nor pay his PPP loan back either.

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especially since electronic tax transcripts are readily available, and routinely used in the industry.

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Yeah, and how much will the prosecution cost?

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Were any of the COVID funds not fraudulent or spent on things that had nothing to do with COVID (see: Malden scholarships)?

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Yes

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