California Man Arrested in Massive $27 Million PPP Fraud Scheme
WASHINGTON, DC - DECEMBER 01: Sen. Angus King (I-ME) sets up a sign alongside a bipartisan group of Democrat and Republican members of Congress as they announce a proposal for a Covid-19 relief bill on Capitol Hill on December 01, 2020 in Washington, DC. The roughly $908 billion proposal includes $288 billion in small business aid such as Paycheck Protection Program loans, $160 billion in state and local government relief and $180 billion to fund a $300 per week supplemental unemployment benefit through March, according to a draft framework. Tasos Katopodis/Getty Images

A California man was arrested on Thursday, July 22, for his alleged involvement in a fraud scheme to obtain $27 million in Paycheck Protection Program (PPP) loans.

The man from Encino reportedly submitted multiple loan applications for the federal government's Paycheck Protection Program.

Robert Benlevi, 52, was arrested after being accused of submitting 27 bank loan applications to four different banks during Summer 2020 on behalf of eight made-up companies he owned that had no workers.

According to CBS Los Angeles, the U.S. Department of Justice said Benlevi allegedly sought PPP loans worth $27 million. The money is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and was guaranteed by the Small Business Administration (SBA).

In his fraudulent applications, the California man claimed that he represented each of his mentioned companies with 100 employees individually and had an average monthly payroll of $400,000.

Robert Benlevi faces allegations of false representation because he said he would use the collected amount for business expenses and payroll, but he used the money for personal expenses instead.

Some of the companies the California man used in the applications were Bestways2 Health LLC, 1Stellar Health LLC, and Joyous-Health4U LLC. Benlevi received three of the PPP loans for $3 million total from one bank, East Bay Times reported.

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PPP Fraud Scheme

The indictment noted that the personal expenses of Robert Benlevi included cash withdrawals, transfers to other personal and business accounts that he also controlled, and pay for credit card debt.

After receiving the proceeds, the California man withdrew from the Bestways2 Health account $248,000 of PPP funds in cashier's checks and deposited into other accounts that he was also controlling.

Benlevi was charged with four counts of money laundering, six counts of false statements in a loan application, and six counts of bank fraud.

Each count of bank fraud and false statements in a loan application carries a maximum penalty of 30 years of federal imprisonment.

The money laundering counts each carries a maximum penalty of 10 years which means that he would be facing decades behind bars.

A federal district court judge would be determining the sentence after considering the U.S. Sentencing Guidelines and other statutory factors in the case. Trial attorneys Emily Culbertson and Helen Lee, who were part of the Criminal Division's Fraud Section, were prosecuting the case.

The CARES Act, which was enacted on March 29, 2020, was primarily designed to provide emergency financial assistance to Americans who suffered the economic effects of the coronavirus pandemic.

A part of the CARES Act focused on giving up to $349 billion in forgivable loans directly to small businesses that would be for job retention and certain other expenses through the PPP. Congress in April 2020 authorized more than $300 billion in additional PPP funding.

The PPP allowed qualified small businesses and other organizations to receive loans with a maturity of two years with only an interest rate of one percent. However, applicants must make sure that PPP loan proceeds must be used on businesses' payroll costs, interest on mortgages, rent, and utilities.

READ MORE: California Man Used $5M COVID Loans To Buy Ferrari, Lamborghini

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Written by: Jess Smith

WATCH: Encino Man, Robert Benlevi, Arrested In Alleged $27M PPP Fraud Scheme Could Face Decades Behind Bars - From CBS Los Angeles