A California real estate developer, Alfred E. Nevis, has been sentenced to 70 months in federal prison for using stolen identities to fraudulently obtain over $1.3 million in loans meant to assist small businesses during the COVID-19 pandemic. Nevis was also ordered to pay restitution to the U.S. Small Business Administration (SBA) and forfeit additional funds to the United States Treasury.
Court documents reveal that between April 2020 and August 2020, Nevis used the identities of multiple individuals, including employees, business associates, and spouses, to obtain Economic Injury Disaster Loans (EIDLs) from the SBA. The EIDL program was part of the economic relief measures established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide urgent financial support to American businesses.
To carry out his scheme, Nevis created fictitious corporations using the stolen identities, obtained Employer Identification Numbers (EINs) from the IRS, and submitted loan applications on behalf of these newly registered entities. For instance, Nevis claimed that a straw corporation called Isley Farms, based in Oregon, had 12 employees and generated over $725,000 in revenue in a 12-month period.
During the period between April 2020 and September 2020, Nevis submitted at least 22 fraudulent EIDL applications using the stolen identities of at least eight individuals, requesting nearly $2.8 million in total. By August 2020, he had obtained more than $1.3 million through these loans and laundered approximately $160,000 of the illicitly obtained funds.
Nevis was indicted on charges of wire fraud, aggravated identity theft, and money laundering. He pleaded guilty to all charges on May 2, 2023. The investigation into the case was conducted by multiple agencies, including the U.S. Treasury Inspector General for Tax Administration, the SBA Office of Inspector General, the Federal Deposit Insurance Corporation Office of Inspector General, and the FBI. The prosecution was handled by Assistant U.S. Attorney Ryan W. Bounds.
Individuals who have information regarding attempted fraud related to COVID-19 can report it to the National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or through the NCDF Web Complaint Form.
Definitions:
– Economic Injury Disaster Loans (EIDLs): Loans disbursed by the SBA as part of the COVID-19 relief measures to assist American businesses facing economic hardships.
– Coronavirus Aid, Relief, and Economic Security Act (CARES Act): A federal law passed in March 2020 to provide financial aid and address the economic impact of the COVID-19 pandemic.
Sources: U.S. Department of Justice (DOJ), U.S. Treasury Inspector General for Tax Administration (TIGTA), SBA Office of Inspector General, Federal Deposit Insurance Corporation (FDIC) Office of Inspector General, Federal Bureau of Investigation (FBI).