Former Banker Sentenced to Jail for Participating in Film-Funding Fraud Program and Mistakenly Applying for COVID-19 Loans | USAO-SDFL
Miami, Florida – A former South Florida banker was sentenced this week to 42 months in prison for engaging in two scams: the first, a scheme to steal over $ 60 million from investors and producers who want funding for films and seek Broadway shows; the second to hide his criminal record on applications for COVID-19 aid loans.
Benjamin Rafael, 31, from South Florida previously admitted his role in legitimizing a sophisticated film funding fraud system. Rafael pleaded guilty to one point conspiracy to commit wire transfer fraud in violation of Title 18, United States Code, Section 1349 (Case No. 19-CR-20447).
According to court records, Rafael’s co-defendants, Benjamin McConley and Jason Van Eman, were both film producers and funders. In these roles, McConley and Van Eman allegedly offered to provide funding to investors and producers who sought funding for the production of films, theatrical performances, and other projects. The indictment that McConley and Van Eman promised the victims that in exchange for the victims’ cash contributions, McConley would “match” the contributions and use the combined funds to secure funding for financial institutions in South Florida and elsewhere.
To promote the plan, McConley and Van Eman recruited Rafael, a then-bank clerk, to deceive victims about the safety of their funds, it is said. Throughout the program, McConley and Van Eman have repeatedly directed Rafael to falsely reassure victims that their contributions or loans have been “matched” as promised in the funding agreements, the court documents read.
According to the indictment, as a result of these misrepresentations and promises, the victims transferred tens of millions of dollars to accounts controlled by the defendants. In truth, the schemers have never “adjusted” the victims’ contributions promised in the funding agreements. Instead, they stole the victims ‘money by transferring the funds to their personal and business bank accounts, often within days of the victims’ contributions or loans, as indicated by court documents.
Following his indictment and admission of guilt in Case No. 19-CR-20447, Rafael filed several applications with various banks for the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). In these motions he did not mention that he had previously pleaded guilty to Case No. 19-CR-20447.
As a result of these fraudulent PPP and EIDL filings, Rafael was charged with misrepresenting a financial institution in violation of Title 18, United States Code, Section 1014 (Case No. 21-CR-20161). Rafael pleaded guilty to PPP fraud earlier this week. At the same court appearance, Rafael was convicted of his conduct in both cases during a consolidated criminal case.
In addition to the combined sentence of 42 months, Rafael was sentenced to redress the victims, withhold money and property attributable to the fraud schemes, and serve a five-year prison term under custody.
Co-defendant Benjamin McConley previously pleaded guilty to a conspiracy to commit wire transfer fraud in Case No. 19-CR-20447 and is due to be convicted by District Judge Raag Singhal on September 14, 2021 at 9:00 a.m. Co-defendant Jason Van Eman is due to be tried on August 30, 2021.
Juan Antonio Gonzalez, Acting US Attorney for the Southern District of Florida, Special Agent George L. Piro of the FBI Field Service in Miami, and Special Representative Amaleka McCall-Brathwaite of the US Small Business Administration, Office of Inspector General (SBA-OIG) , Investigation Department, Regional Office East, announced this.
FBI Miami and SBA-OIG are investigating the matter. The 2019 case is being followed up by US assistant attorneys Christopher Browne and Elizabeth Young. The 2021 case was followed up by U.S. Assistant Attorney Lacee Monk. U.S. Assistant Attorney Marx Calderon is responsible for the asset recovery component in both cases.
The CARES Act is federal law passed March 29, 2020, designed to provide emergency financial aid to millions of Americans suffering from the economic impact of the COVID-19 pandemic. One source of relief from CARES has been the approval of hundreds of billions of dollars in forgiving small business loans for job retention and certain other expenses through the PPP.
The PPP enables qualified small businesses and other organizations to obtain loans with a term of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses for labor costs, mortgage interest, rent and utilities. The PPP allows interest waiver and amortization of the PPP loan if the company spends the loan proceeds on these expense items within a specified period of time after receipt of the proceeds and uses at least a certain percentage of the PPP loan proceeds on labor costs.
The EIDL program is designed to provide economic relief to small businesses that are currently experiencing a temporary loss of revenue. EIDL proceeds can be used to fund a wide range of working capital and normal business expenses, such as: B. the continuation of health services, rent, utilities and fixed debt payments. If an applicant is also receiving a loan under the PPP, the EIDL funds cannot be used for the same purpose as the PPP funds.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to mobilize the Department of Justice’s resources in collaboration with government agencies to step up efforts to combat and prevent pandemic-related fraud. The task force supports efforts to identify and prosecute the most guilty national and international criminal actors and assists authorities tasked with managing fraud prevention assistance programs, including by complementing and incorporating existing coordination mechanisms, resource identification and Techniques for detecting fraudulent actors and their systems, and sharing and using information and intelligence gained from previous enforcement efforts. For more information on the ministry’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about suspected COVID-19-related fraud can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) hotline at 866-720-5721 or using the NCDF web complaint form at: https: // www .justice.gov / disaster-fraud / ncdf-disaster-complaint form.
A copy of this press release is available on the US Attorney’s website for the Southern District of Florida at www.usdoj.gov/usao/fla.