An Arizona man and three associates have been charged in a scheme to defraud the U.S. Small Business Administration of at least $178 million in loans meant to help small businesses during the coronavirus pandemic, according to the U.S. Attorney for the District of Oregon.
Eric Karnezis, 43, from Sedona, Arizona, has been charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering in a 23-count indictment. His co-defendants are Lynisha Wells, 47, and Nikkia Bennett, 43, both from Chula Vista, California, and Fredrico Williams, 48, from San Diego.
From January 2021 to March 2022, Karnezis allegedly conspired with various recruiters, including Williams, to obtain fraudulent business information from customers like Wells and Bennett. They used this info to submit fraudulent Paycheck Protection Program loan applications to the U.S. Small Business Administration.
"To facilitate the scheme, Karnezis and his co-conspirators created fictitious documents to support their fraudulent loan applications, including false payroll information and tax documents," a release explained.
Overall, Karnezis allegedly submitted and caused to be submitted at least 1,300 PPP applications. These applications tried to get over $178 million from SBA. The federal government funded about $105 million requested from these fraudulent applications.
