Small business owners charged in fraudulent pandemic loan application scheme

McALLEN, Texas – Five Rio Grande Valley residents have been indicted for wire fraud in a scheme involving the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program, announced U.S. Attorney Nicholas J. Ganjei.

Authorities have now arrested the final two - Sandra Pope Solis, 60, Rancho Viejo, and Lesley Chavez, 42, Edinburg - who are expected to make their initial appearances before U.S. Magistrate Judge J. Scott Hacker at 10 a.m. Rolando Santiago Benitez, 51, Harlingen, is set for a detention hearing at 1:30 p.m., while Bernardo Gomez Jr., 46, Edinburg, and Edgar De La Garza, 45, Brownsville, had previously made their appearances in federal court.

According to the eight-count indictment returned Aug. 5, all five individuals submitted fraudulent loan applications to obtain EIDL and/or PPP loans through the Small Business Administration (SBA). The charges allege these loan programs were intended to alleviate economic injury the COVID-19 pandemic caused, allowing small businesses to continue to make payroll and other business-related payments. However, these local business owners allegedly took advantage of these programs and misused the funds.

From June 2020 through November 2021, Benitez, Pope, Chavez, Gomez and De La Garza each submitted application(s) for loans the SBA sponsored, according to the charges. As part of the scheme, they allegedly helped alter or create falsified tax and related business documents to inflate the approvable loan amount. The indictment alleges these documents were then submitted with the applications. Once the loans were approved, each then allegedly used the fraudulently obtained proceeds for personal expenses and enrichment.  

The scheme resulted in a total loss of $685,800, according to the charges.  

If convicted, all five each face up to 20 years in prison and a possible $250,000 maximum fine.

FBI and SBA - Office of Inspector General conducted the investigation with the assistance of Texas Department of Insurance. Assistant U.S. Attorney Lee Fry is prosecuting the case.

The COVID-19 Fraud Enforcement Task Force was established to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department's response to the pandemic, please visit Justice.gov/Coronavirus and Justice.gov/Coronavirus/CombatingFraud.

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 (NCDF) Hotline via the NCDF Web Complaint Form.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.