Robert Benlevi, PPP Loan Forgery, California 2020

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Table of Contents

$27M PPP Fraud Scheme Unravels in Los Angeles

Los Angeles, CA – In a shocking turn of events, a California man has been arrested and charged with a $27 million Paycheck Protection Program (PPP) fraud scheme. Robert Benlevi, 52, of Encino, submitted 27 bank loan applications to four banks between April and June 2020 on behalf of eight companies solely owned by Benlevi.

According to court documents, Benlevi allegedly sought a total of $27 million in forgivable PPP loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In his fraudulent applications, Benlevi allegedly represented that each of his companies had 100 employees and average monthly payroll of $400,000, even though he knew that the companies did not have any employees or payroll expenses.

The indictment alleges that based on Benlevi’s fraudulent loan applications, three of Benlevi’s companies — 1Stellar Health LLC, Bestways2 Health LLC, and Joyous-Health4U LLC — obtained $3 million in PPP funds. Although Benlevi falsely represented that the funds sought through the PPP loan applications would be used to pay payroll and certain other business expenses, he instead used them for personal expenses, including cash withdrawals, payments on his personal credit cards, and transfers to other personal and business accounts he controlled.

In a single day, Benlevi withdrew from the Bestways2 Health account $248,000 of PPP funds in cashier’s checks, which were deposited into other accounts that Benlevi controlled. The indictment alleges that Benlevi used the funds for personal expenses, including luxury items and real estate purchases.

Benlevi is charged with six counts of bank fraud, six counts of false statements in a loan application and four counts of money laundering. Each count of bank fraud and false statements in a loan application carry a maximum penalty of 30 years in federal prison, and the money laundering counts each carry a maximum penalty of 10 years.

A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The investigation was led by the FBI, with assistance from the SBA OIG and FDIC OIG. Trial Attorneys Emily Culbertson and Helen Lee of the Fraud Section are prosecuting the case.