A Nevada man pleaded guilty today to participating in a scheme to defraud multiple financial institutions by filing fraudulent bank loan applications that sought more than $1.9 million dollars in forgivable loans guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The man also pleaded guilty to collecting over $350,000 from employees as income tax and Federal Insurance Contributions Act (FICA) withholdings for tax years 2014 to 2019, which he failed to pay over to the IRS on the employees’ behalf.
According to court documents and admissions made in court, Jorge Abramovs, 40, submitted at least 12 Paycheck Protection Program (PPP) loan applications to seven different lenders in spring 2020. As part of the scheme, he submitted the loan applications in the names of multiple different businesses while falsely claiming to have numerous employees earning wages. In fact, these businesses were non-operational: they had no employees and no monthly payroll.
To support the fraudulent loan applications, Abramovs submitted false information about the businesses, fake tax documents and payroll schedules, and other forged documents. In total, Abramovs fraudulently obtained $1,986,737 in PPP loans. Rather than spending these funds to pay workers or for other specified business expenses as certified in the loan applications, Abramovs spent these funds on purchases for himself, including luxury condominiums, a Bentley, a Tesla, and payments on his home mortgage.
Abramovs further admitted that he failed to pay $475,000 in taxes owed to the IRS, relating to a different set of companies Abramovs controlled and operated. From 2014 through 2019, Abramovs was responsible for collecting and paying over employee-related taxes to the IRS, including withheld employee federal income tax, employee and employer FICA contributions, and federal unemployment tax. But Abramovs did not pay these withheld funds over to the IRS. Similarly, he failed to pay employer FICA contributions and unemployment tax payments the entities owed the IRS for those employees.
Abramovs pleaded guilty to one count of bank fraud, one count of monetary transactions in criminally derived property, and one count of willful failure to collect or pay over tax. U.S. District Judge Richard F. Boulware II scheduled sentencing for January 6, 2022. Abramovs faces a total statutory maximum penalty of 45 years in prison.
Christopher Chiou, Acting U.S. Attorney for the District of Nevada; Aaron C. Rouse, Special Agent in Charge of the FBI’s Las Vegas Field Office; Weston King, Special Agent in Charge of the Small Business Administration Office of the Inspector General’s (SBA OIG) Western Region Office; J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA); and C. Darren Lian, Special Agent in Charge of the IRS-Criminal Investigation made the announcement.
This case was investigated by the FBI, SBA OIG, TIGTA, and IRS-Criminal Investigation. Trial Attorney Joseph McFarlane of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jessica Oliva of the U.S. Attorney’s Office for the District of Nevada are prosecuting the case.
In May, the Attorney General 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. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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