Saugerties man accused of coronavirus scam arrested in New Jersey area

ALBANY – The FBI on Thursday morning arrested a Saugerties man in the New Jersey area he allegedly bought after he stole nearly $ 5 million in COVID-19 relief loans from the federal government.

Jean Lavanture, 47, also known as “Rudy”, has been charged with bank fraud in the alleged scam, in which he obtained $ 4.9 million in loans through the federal check protection program. payroll and a disaster relief fund using bogus companies that had no operations.

Federal prosecutors allege that between June 16 and July 22, Lavanture received $ 4.9 million in loans under the Paycheck Protection Program and the Federal Economic Disaster Loan Program.

Lavanture obtained the loans from two banks for five bogus Saugerties-based companies that he created and which had no business, according to the US attorney’s office. Lavanture, however, reportedly submitted false tax documents that appeared to show the companies had employees, “substantial income” and payroll costs.

However, none of the purported companies controlled by Lavanture have ever reported income to the IRS in recent years, nor have they ever reported any employees to the state Department of Labor.

Federal authorities allege Lavanture used the $ 4.9 million in loans to buy a motel in Rockaway Beach, Missouri, and a $ 1 million estate in New Jersey that included a “Tuscan style” mansion of 18 rooms.

There has been a lot of criticism that real businesses and big businesses that don’t deserve PPP funds got them when the money should have gone to smaller, struggling family businesses.

However, the Lavanture case shows that some malicious actors may have attempted to take advantage of the system by using shell companies and bogus tax returns.

Lavanture faces 30 years in prison and a $ 1 million fine.

The investigation was aided by the FBI’s COVID-19 Fraud Response Task Force, as well as the IRS and the Office of the Inspector General of the Small Business Administration. The case is being pursued by Deputy US Prosecutors Michael Barnett and Joshua R. Rosenthal.

Lavanture, who could not be reached for comment, has a long criminal record and has been convicted by both the federal and state governments of trafficking in counterfeit devices, robbery and misuse of business names. federal agencies. The FBI also says Lavanture has not filed tax returns since 2017.

Prosecutors allege Lavanture created five bogus companies with names like the Woodstock Torch Awards and Dreamcast Entertainment to secure the loans from Bank of America and Kabbage, an online small business lender. The SBA guarantees the loans through the PPP.

In a request for a $ 1.5 million PPP loan from Bank of America, Lavanture reportedly submitted tax returns for 2019 for an entity called Project Youth Experience which Lavanture said had 73 employees and $ 7.2 million in annual salary. These tax returns were never submitted to the IRS, prosecutors found.

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