LOS ANGELES – A downtown Los Angeles man was sentenced today to 63 months in federal prison for fraudulently obtaining more than $150,000 – and attempted to obtain an additional $1.85 million – in COVID-relief loans for several companies he claimed to own and operate, and for illegally possessing firearms – including three AR-style rifles – and thousands of rounds of ammunition.
Sean Schoepflin, 44, a.k.a. “Sean Fitzgerald,” was sentenced by United States District Judge Fernando M. Olguin, who ordered Schoepflin immediately remanded into custody at today’s hearing.
At the conclusion of a three-day trial in late 2022, a jury found Schoepflin guilty of two counts of wire fraud and two counts of money laundering. At a separate two-day trial that concluded on August 16, a jury found Schoepflin guilty of one count of being a felon in possession of firearms and ammunition.
From April 2020 to October 2021, Schoepflin made numerous false statements to the United States Small Business Administration to secure more than $150,000 – and attempting to secure an additional $1.85 million – in Economic Injury Disaster Loans (EIDLs) for his business.
In applying for the EIDL loans, Schoepflin falsely stated that the business entity he created had several employees and more than half a million dollars in revenue, and that he would use the EIDLs for working capital for the business. Schoepflin also falsely stated on loan application that he had never been convicted of a felony.
In fact, his purported business, Capital Adventures Inc., had no employees and little to no revenue. Schoepflin used the EIDLs largely for personal expenses, and he had previously been convicted of multiple felonies.
For example, Schoepflin falsely stated in the loan application that Capital Adventures had revenues of $560,000 in a one-year period just before the pandemic. When an SBA employee sent an email to Schoepflin requesting Capital Adventures’ business tax return to show proof of the company’s existence as a business entity, Schoepflin sent an unsigned tax form that stated that Capital Adventures had gross sales or receipts of $625,112 in 2019.
In fact, Capital Adventures did not file the required IRS form for 2019 until July 2021, after it requested and was denied an increase for its EIDL. Furthermore, between February 2018 and April 2020, Capital Adventures’ bank accounts had total deposits of approximately $35,000.
“While the rest of the world was grappling with the effects of the worst pandemic in modern history…Sean Schoepflin saw this time as an opportunity to steal hundreds of thousands of dollars from American small businesses for his own gain,” prosecutors argued in a sentencing memorandum. “[Schoepflin]…utilized four fictitious companies over the span of a year to apply repeatedly for COVID-19 funds to which [he was] not entitled.”
In March 2022, federal law enforcement searched Schoepflin’s residence in connection with his COVID fraud scheme. While there, agents recovered nine firearms, including three AR-style assault rifles, and more than 4,000 rounds of ammunition belonging to Schoepflin.
Schoepflin is not permitted to possess firearms or ammunition because of his felony convictions dating back to the late 1990s in Florida state court, which include witness tampering, cocaine possession, and burglary.
Schoepflin’s wife, Erika Leon, 46, a.k.a. “Erika Fitzgerald,” also of downtown Los Angeles, has pleaded not guilty to two counts of wire fraud in the COVID fraud case. She is expected to go to trial early next year.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and the Treasury Inspector General for Tax Administration investigated this matter. The Small Business Administration’s Office of Inspector General and the Naval Criminal Investigative Service provided substantial assistance with the investigation.
Assistant United States Attorneys Solomon Kim and David C. Lachman of the Terrorism and Export Crimes Section are prosecuting this case.
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.