ATLANTA — Jose Fernandez has been convicted of evading more than $5 million by filing fraudulent applications for the Paycheck Protection Program (“PPP”), filing false tax returns using stolen identities, using credit cards he was stolen with obtained identities and claimed check fraud. Ultimately, he obtained more than $2 million in fraudulent funds, which he then used for his personal gain.
“Fernandez has committed a slew of frauds, including attempting to steal millions of dollars from a COVID relief program, financial institutions and the IRS by stealing the identities of innocent victims to file false tax returns,” said US Attorney Ryan K. Buchanan. “His sentence reflects the extent of his criminal behavior.”
“Fernandez will have to spend many years in prison reflecting on his long record of crimes and his greed. Not only did he hurt business owners in need of Covid relief funds, but he even stole the identities of family members,” said Keri Farley, Acting Special Agent for the FBI Atlanta. “Together with our law enforcement partners, we will continue to identify and hold accountable anyone who breaks the law to pocket money from these programs.”
“People who commit PPP fraud and identity theft can expect to be held just as accountable as Jose Fernandez was,” said Lisa Fontanette, Acting Special Agent in Charge, IRS Criminal Investigation, Atlanta Field Office. “We will continue to work with our law enforcement partners to bring to justice those who commit these types of crimes that cause financial harm to honest, law-abiding citizens and defraud the U.S. government.”
“This judgment holds the defendant responsible in this case for attempting to fraudulently obtain millions of dollars from the Paycheck Protection Program, the IRS and our nation’s financial institutions,” said Special Agent in Charge Kyle A. Myles of the Federal Deposit Insurance Corporation Office of the Inspector General (FDIC OIG). “The FDIC OIG remains committed to working with our law enforcement partners to investigate financial crimes and bring to justice those who threaten to undermine the integrity of our nation’s financial system.”
“The Treasury Department’s Inspector General for Tax Administration is aggressively pursuing those who seek to defraud the taxpayer-funded Coronavirus Aid, Relief, and Economic Security Act programs, which were put in place to provide support to American entrepreneurs during unprecedented times,” said Inspector General J .Russell George. “We appreciate the efforts of the U.S. Department of Justice and our law enforcement partners to ensure those involved in criminal activity are held accountable.”
According to U.S. Attorney Buchanan, the charges and other information presented in court are: The Coronavirus Aid, Relief, and Economic Security Act (“CARES”) is a federal law enacted on March 29, 2020. It is designed to provide emergency financial assistance to the millions of Americans suffering the economic impact of the COVID-19 pandemic. A source of relief from the CARES Act was the approval of up to $349 billion in forgivable loans to small businesses for job preservation and certain other expenditures under the PPP. In April 2020, Congress approved over $300 billion in additional PPP funding. Additional funds were approved by Congress in December 2020. The PPP allows qualifying small businesses and other organizations to obtain loans with a two-year term and an interest rate of 1 percent. The proceeds from PPP loans must be used by companies for payroll costs, mortgage interest, rent and utilities. The PPP allows for waivers of interest and principal if companies spend the proceeds on those expenses within eight weeks of receipt and use at least 75 percent of the waived amount on payroll.
Fernandez operated several small businesses in the Atlanta area as early as at least 2016-2020. Fernandez filed multiple PPP filings on behalf of several companies he or his partners control, which contained materially incorrect information about the companies’ total headcount, company expenses, and revenues. Because of these false requests, he received over $1.6 million in fraudulent PPP funds. He then used these fraudulently obtained funds to make illicit expenses, including buying a house, cars, and other personal belongings.
Fernandez, who ran an accounting firm for several years, also stole thousands of identities of his own clients and others at a medical supply company to file false tax returns claiming over $2 million in fraudulent refunds. The IRS was able to prevent the vast majority of these funds from being given to Fernandez.
In addition, Fernandez committed fraud towards financial institutions. He procured fraudulent credit cards on behalf of family members and identity theft victims, which he then used to make hundreds of thousands of dollars in fraudulent purchases. Eventually, Fernandez obtained blank check stock to be used to print tax refund checks for his tax prep business clients. With these checks, he attempted to fraudulently write more than $900,000 worth of checks to companies he controlled and to pay off personal expenses and debts.
Jose Fernandez, 36, of Winter Haven, Fla., was sentenced to five years and 10 months in prison followed by three years of supervised release. Fernandez was indicted on January 25, 2023 in a five-count criminal trial and pleaded guilty.
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Department, the Office of Inspector General of the Federal Deposit Insurance Corporation, and the Treasury Department’s Inspector General for Tax Administration. The Gwinnett County Police Department also provided significant assistance with this investigation.
Assistant US Attorneys Thomas J. Krepp and Tracia M. King were presiding over the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to pool the Department of Justice’s resources in collaboration with agencies across government to increase efforts to combat and prevent pandemic-related fraud. The task force increases efforts to identify and prosecute the most criminal domestic and international criminals and assists agencies charged with administering fraud prevention assistance programs, including through the enhancement and integration of existing coordination mechanisms, identification of resources and fraud detection techniques Stakeholders and their plans, and the sharing and use of information and lessons learned from previous enforcement efforts. For more information on the Department’s response to the pandemic, visit https://www.justice.gov/coronavirus
Anyone with information about suspected fraud related to COVID-19 may report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) hotline at 866-720-5721 or through the NCDF web complaint form at https:// /www .justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
For more information, please contact the US Attorney’s Office of Public Affairs at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The web address of the US Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
