Fort Myers couple is indicted in $3.4M Covid Relief fraud scheme
A grand jury returned an indictment that includes charges of fraud, conspiracy to commit money laundering, and illegal monetary transactions.
A grand jury returned an indictment Friday charging Timothy Craig Jolloff, 46, and Lisa Ann Jolloff, 56, both of Fort Myers, with wire fraud, conspiracy to commit money laundering, and illegal monetary transactions in connection with Covid Relief fund fraud. Timothy Jolloff is also charged with multiple counts of bank fraud.
The indictment also notifies the defendants that the United States intends to forfeit a 2019 GMC truck and approximately $3,403,265, which are alleged to be traceable to proceeds of the offense.
Timothy Jolloff's charges (and potential maximum federal prison sentences per count) include 11 counts of wire fraud (20 years), seven counts of bank fraud (30 years), four counts of illegal montary transactions (10 years) and conspiracy to commit money laundering (10 years).
Lisa Jolloff's charges and penalties include wire fraud (20 years), four counts of illegal montary transactions(10 years) and conspiracy to commit money laundering (10 years).
According to the indictment and other court documents, between April and March 2021, the Jolloffs submitted false and fraudulent Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) loan applications to the Small Business Administration, as well as PPP approved lenders.
In the PPP loan applications, the Jolloffs falsely represented the number of employees and average monthly payroll for the applicant businesses. The Jolloffs also falsely represented and certified that PPP funds would be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments.
In EIDL applications, Timothy Jolloff misrepresented the gross revenue and cost of goods sold for the applicant businesses for which he sought EIDL funds. He also misrepresented the number of employees of the EIDL applicant businesses. Moreover, in loan documents signed and submitted by Timothy Jolloff for EIDL loans, he mispresented that EIDL proceeds would be used solely for working capital and to alleviate economic injury.
The Jolloffs’ false and fraudulent representations caused the Small Business Administration and PPP lenders to approve and fund 11 EIDLs and 8 PPP loans, as well as EIDL Advances, totaling approximately $3,403,265. The Jolloffs then conspired to unlawfully use PPP and EIDL funds to purchase three pontoon boats totaling more than $300,000, real estate in Fort Myers, Florida and Angola, Indiana, home furnishings, outdoor kitchens for their homes, a 2019 GMC truck, a 2020 Polaris UTV, as well as jewelry, and two dogs.
The Jolloffs also allegedly fraudulently used more than $600,000 in EIDL funds to purchase a furniture business in Indiana and a landscaping business in Sarasota, Florida, which had no connection to the businesses for which the Jolloffs had obtained COVID relief money.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if the business spends the proceeds on these expenses within a set period and uses at least a certain percentage of the loan toward payroll expenses.
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 cover a wide array of working capital and normal operating expenses, such as continuation of health care benefits, rent, utilities, and fixed debt payments. If an applicant also obtains a loan under the PPP, the EIDL funds cannot be used for the same purpose as the PPP funds.
The Jolloff's made their initial appearances June 16 in Fort Myers federal court. Their arraignment is scheduled July 20. There was no attorney of record listed for the couple in court documents.
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