ATLANTA – Jose Fernandez has been found guilty of evading more than $5 million by submitting fraudulent applications for the Paycheck Protection Program (“PPP”), filing false tax returns using stolen identities, using stolen credit cards, and alleged check fraud. He ultimately obtained more than $2 million in fraudulent funds, which he then used for his personal gain.
“Fernandez committed a series 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 U.S. Attorney Ryan K. Buchanan. “His sentence reflects the extent of his criminal behavior.”
“Fernandez will spend many years in prison reflecting on his long history of crime and greed. Not only did he harm business owners who relied on Covid relief funds, but he even stole the identities of family members,” said FBI Atlanta Acting Special Agent in Charge Keri Farley. “Together with our law enforcement partners, we will continue to identify and hold accountable anyone who breaks the law to collect money from these programs.”
“People who commit PPP fraud and identity theft can expect to be held just as accountable as Jose Fernandez,” 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, who cause financial harm to honest, law-abiding citizens, and who defraud the U.S. government.”
“This ruling holds the defendant in this case responsible 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 attempt to defraud the taxpayer-funded Coronavirus Aid, Relief, and Economic Security Act programs, which were established to support American business owners 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 that those involved in criminal activity are held accountable.”
According to U.S. Attorney Buchanan, the charges and other information presented in court are as follows: The Coronavirus Aid, Relief, and Economic Security Act (“CARES”) is a federal law enacted on March 29, 2020. It is intended to provide emergency financial assistance to the millions of Americans suffering from the economic impact of the COVID-19 pandemic. One source of relief from the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses under the PPP. In April 2020, Congress approved over $300 billion in additional PPP funding. Additional funding was approved by Congress in December 2020. The PPP allows qualified small businesses and other organizations to receive loans with a term of two years and an interest rate of 1 percent. Proceeds from PPP loans must be used by businesses for payroll costs, mortgage interest, rent and utilities. The PPP provides for waiver of interest and principal if businesses spend the proceeds on these expenses within eight weeks of receipt and use at least 75 percent of the forgiven amount for payroll.
Fernandez previously operated several small businesses in the Atlanta area from at least 2016-2020. Fernandez submitted multiple PPP applications on behalf of several companies controlled by him or his partners that contained materially false information about the companies' total number of employees, company expenses, and revenues. As a result of these false requests, he received over $1.6 million in fraudulent PPP funds. He then used these fraudulently obtained funds to make illegal expenses, including purchasing a home, cars and other personal items.
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 more than $2 million in fraudulent refunds. The IRS was able to prevent most of these funds from being passed on to Fernandez.
In addition, Fernandez committed fraud against financial institutions. He obtained fraudulent credit cards in the names of family members and identity theft victims, which he then used to make hundreds of thousands of dollars' worth of fraudulent purchases. Eventually, Fernandez obtained a blank check inventory that he could use to print tax refund checks for his business clients. He attempted to use these checks to fraudulently write checks worth more than $900,000 to companies he controlled and to pay personal expenses and debts.
Jose Fernandez, 36, of Winter Haven, Florida, was sentenced to five years and 10 months in prison, followed by three years of supervised release. Fernandez was indicted and pleaded guilty to a five-count criminal case on January 25, 2023.
This case was investigated by the Federal Bureau of Investigation, the Criminal Investigation Division of the Internal Revenue Service, the Office of Inspector General of the Federal Deposit Insurance Corporation, and the Inspector General for Tax Administration of the Treasury Department. The Gwinnett County Police Department also provided significant assistance in this investigation.
Assistant U.S. Attorneys Thomas J. Krepp and Tracia M. King prosecuted the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to pool the resources of the Department of Justice in collaboration with agencies across the government to strengthen efforts to combat and prevent pandemic-related fraud. The Task Force will strengthen efforts to identify and prosecute the most criminal domestic and international criminals and will support agencies charged with administering fraud prevention assistance programs, including through improving and integrating existing coordination mechanisms, identifying resources, and Fraud detection techniques. Interest groups and their plans, and the sharing and use of information and intelligence from previous enforcement efforts. For more information about the Department's response to the pandemic, 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 used. Justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
For further information, please contact the U.S. Attorney's Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The web address for the U.S. Attorney's Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
