Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment in White Plains federal court charging ELIZIER SCHER with wire fraud in connection with his scheme to defraud the U.S. Small Business Administration of more than $1.6 million in COVID-19 relief funds. SCHER was arrested this morning and was presented in White Plains federal court earlier today.
U.S. Attorney Damian Williams said: “As alleged, the defendant schemed to steal taxpayer funds intended for small businesses in need of assistance during the pandemic. My Office will continue to investigate and prosecute those who illegally seek to profit from a national emergency.”
FBI Assistant Director -in-Charge Michael J. Driscoll said: “Administration of more than $1.6 million in COVID-19 relief funds. Elizier Scher allegedly made materially-false statements in at least a dozen applications for money intended to assist honest businesses navigate the financial hardships they faced as a consequence of the pandemic. As today’s action demonstrates, the FBI remains committed to bringing to justice those who would aim to serve their own greed at the expense of the government and American taxpayers.”
According to the Indictment unsealed today in White Plains federal court[1]:
The SBA is a federal agency that administers assistance to American small businesses, including the Economic Injury Disaster Loan (“EIDL”) program, which was intended to provide funding to help small business recover from the economic impacts of the COVID-19 pandemic. The maximum amount of an EIDL loan is determined by a formula based on the date the borrower began operating and the borrower’s gross revenue and cost of goods sold for the twelve months prior to January 31, 2020. The loans can be used for only working capital and other normal operating expenses. While the loans generally need to be repaid, some borrowers are eligible for up to $15,000 in advances that do not need to be repaid.
Over an approximately four-hour period on or about July 13, 2020, SCHER submitted twelve applications for EIDL loans in a principal amount of $150,000 to the SBA over the Internet on behalf of twelve different corporations that he owned and controlled. SCHER further requested on each application that the borrower be considered for an advance of up to $10,000 that did not need to be repaid. SCHER made materially false statements in each application with respect to each applicant’s gross revenue and cost of goods sold for the twelve-month period prior to January 31, 2020.
Between on or about July 20, 2020 and on or about August 11, 2020, eleven of the twelve applicants received a net total of $1,648,900 in loan proceeds from the SBA. SCHER used the proceeds to buy real estate and to pay credit card expenses instead of using it for working capital for the borrowers, as SCHER had agreed to do in the loan agreements he executed on behalf of the borrowers.
SCHER, 33, of Spring Valley, New York is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Williams praised the investigative work of the FBI.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
No comments:
Post a Comment