Keith William Nicoletta, 48, was charged with bank fraud and illegal monetary transactions. The press did not name an attorney for him.
According to the complaint, the accused applied for a Paycheck Protection Program (PPP) loan by claiming that he owned a scrap metal business that employed 69 workers whose monthly payroll expenses totaled $760,000. In reality, he had reported no payroll to the state for any workers in 2019 or 2020, the complaint alleges.
Billions of dollars worth of PPP loans were approved by Congress as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was enacted in March 2020. The loans, which were backed by the Small Business Administration (SBA), were meant to provide immediate assistance to American businesses that were negatively affected by the COVID-19 pandemic. Qualifying businesses must use the loan proceeds to retain workers or make lease, utility, and mortgage interest payments.
The defendant’s loan was approved and he reportedly received $1.9 million in PPP money, but he did not use the funds for payroll and other business-related expenses. He instead immediately laundered the money by transferring it between various accounts at different banks, sources allege. He used more than $160,000 to buy a 2020 Mercedes and a 2020 Ford F-250 pickup truck, the complaint claims. He also purportedly wired roughly $537,000 to a property management company. None of the money he received, the complaint says, was used for the expenses outlined in the PPP agreement.
The accused from Dade City isn’t the first South Florida resident to be accused of COVID-relief fraud. In July, a Miami man was arrested and charged with fraud for allegedly obtaining $3.9 million in PPP loans and using the money to purchase lavish items, including a Lamborghini. Earlier this month, rapper Diamond Blue Smith of Miramar was similarly charged after he allegedly pocketed millions of dollars he received from the PPP.
As of October 7, the Department of Justice has filed criminal charges against 65 borrowers accused of PPP loan fraud. The defendants in those cases collectively attempted to obtain $227 million in loan proceeds, according to the Justice Department. Congress has reportedly intensified its oversight of the loan program, and the SBA has vowed to audit all PPP loans in excess of $2 million.
Fraud charges involving federal COVID-19 relief programs are expected to increase as more PPP borrowers are audited by the SBA. Any South Florida business owner concerned about compliance with the terms of their PPP loan should immediately consult an attorney and not wait to be contacted by investigators. A good attorney can assess the potential for civil and criminal exposure and advise the next step to take.
South Florida Fraud Defense Attorney