Karen Chapon, also known as Karen Hannafious, 50, was charged with one count of bank fraud and one count of making false statements to a financial institution. The press did not name an attorney for her.
According to the criminal complaint, Chapon allegedly made multiple false statements about her companies’ payroll expenses and business operations in order to support six fraudulent loan applications. The complaint claims she submitted doctored documents, including fraudulent tax filings, in her applications. The complaint did not name any accomplices in the case.
In one example, Chapon purportedly misrepresented her payroll expenses to a bank by claiming that her company, Heavenly Tahoe Properties, paid several million dollars in employee wages in 2019. In support of the application, she allegedly submitted a fraudulent copy of an Internal Revenue Service (IRS) Form 940 unemployment tax return that showed her company had paid nearly $2.5 million in wages. However, the IRS reportedly does not have any record of her company filing any tax returns in 2019. Publicly available records show the company’s Nevada corporate registration is no longer valid, according to sources.
Chapon also allegedly lied about being convicted of a felony in the past five years in the application forms. Records show she allegedly managed to acquire nearly $200,000 from insurance and loan companies in 2017 by submitting claims using forged death certificates and fake invoices. She pleaded guilty to defrauding an insurance company and was sentenced to six years in prison with eligibility for parole after two years, according to the Nevada Attorney General’s Office.
Chopan allegedly received nearly 600,000 in PPP loans via five of her loan applications. She allegedly applied for another $500,000 loan that was not disbursed. A majority of the money she reportedly received has already been seized by the federal government. This includes more than $500,000 from the bank account of one of her companies and a Mercedes Benz SUV, according to the U.S. Attorney’s Office for Nevada.
PPP loans for small American businesses are authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was enacted by Congress on March 29, 2020. The CARES Act was meant to provide emergency financial relief to American businesses suffering adverse economic effects related to the coronavirus pandemic. Congress authorized over $500 billion in forgivable loans for small businesses for use related to payroll costs, rent, utilities, and interest on mortgages.
Fraud is a serious offense with life-altering consequences. Anyone suspected of committing fraud related to federal coronavirus relief programs should immediately consult an experienced fraud defense attorney. An attorney can conduct an independent investigation and determine the best course of action in your case.
South Florida Fraud Defense Attorney
Are you accused of committing fraud in South Florida involving COVID-19 relief programs? Contact Brian Silber, P.A. to set up a free initial consultation with one of South Florida’s most experienced fraud defense attorneys.