Suburban Businessman and California Partner Accused of Scamming $6.3M in COVID Relief Funds

Defendants Allegedly Exploited Paycheck Protection Program and Economic Injury Disaster Loan Program

A suburban businessman and his California partner are facing federal charges after allegedly scamming over $6.3 million from small business relief programs tied to the CARES Act.

Alleged Scheme

Francesco Distefano, 28, from Addison, Illinois, and Sargis Urumieh, 57, from Glendale, California, are accused of exploiting two major Covid-19 relief programs: the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) Program.

PPP and EIDL Programs

The PPP was designed to provide forgivable loans for essential business expenses like payroll and rent, while the EIDL program offered loans and grants to help cover operating costs.

Alleged Fraud

According to prosecutors, the duo submitted bogus applications for loans and grants on behalf of two companies, West Coast POS Inc. and National POS Inc., where Urumieh was a corporate officer.

Distefano also allegedly applied for loans for his own company, Distefano Enterprises LLC.

The applications reportedly included false details about the companies’ employee numbers, revenues and payroll expenses.

Use of Fraud Proceeds

The indictment claims Distefano splurged on luxury cars, including a Lamborghini Huracan, a Maserati Ghibli and a Porsche 911. It also says both men used fraud proceeds and a fake mortgage application to buy a home in Glendale, California.

Charges and Court Dates

Distefano is now facing 11 counts of wire fraud, five counts of money laundering, and one count of making a false statement to a bank. Urumieh is charged with eight counts of wire fraud.

Their court dates in Chicago haven’t been scheduled yet.

Conclusion

The alleged scheme by Distefano and Urumieh is a stark reminder of the need for vigilance in protecting against fraud and abuse of government programs. The accused individuals face serious charges and potential consequences if convicted.

FAQs

Q: What programs were allegedly exploited by the defendants?
A: The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) Program.

Q: What charges are the defendants facing?
A: Distefano is facing 11 counts of wire fraud, five counts of money laundering, and one count of making a false statement to a bank. Urumieh is charged with eight counts of wire fraud.

Q: What is the total amount allegedly stolen?
A: Over $6.3 million.

Q: What is the current status of the court cases?
A: Their court dates in Chicago haven’t been scheduled yet.