Brooklyn man sentenced to 72 months for $1.9M PPP fraud, Bentley seized
On Tuesday in Brooklyn federal court, Leon Miles, 53, was sentenced to 72 months’ imprisonment following his guilty plea to making false statements in an application for over $1.9 million from the Paycheck Protection Program (PPP), which Congress created to disperse COVID-19 relief as a part of the Coronavirus Aid, Relief and Economic Security (CARES) Act.
The court ordered the forfeiture in the amount of $1,904,593 – including a 2020 Bentley seized by the government – and $598,299.39 restitution to the authorized lender.
In May 2020, Miles applied for a PPP loan in the amount of $1,904,593 on behalf of a limited liability company he owns in Brooklyn, and falsely claimed that the company had 50 employees with an average payroll of $761,838. Miles submitted fraudulent personal and business tax returns never filed with the IRS. Miles’ company filed no tax returns with any income and did not disperse any wages to employees. The proceeds of his crime were deposited into his personal savings account.
Miles withdrew hundreds of thousands of dollars, a portion of which he used to acquire a 2020 Bentley Continental for approximately $250,000 and a 2020 Cadillac Escalade for approximately $100,000. The government seized the Bentley and the insurance proceeds to Miles’ Cadillac, which had been totaled. $1.3 million of the loan proceeds were frozen and returned to the lender.
The CARES Act is a federal law enacted in March of 2020 to provide economic and emergency financial assistance in connection to the burden of the COVID-19 pandemic. Forgivable loans for the purposes of job retention and other expenses were issued through the PPP. Forgiveness on the loan was enacted if the recipient spent the proceeds of the loan on specified expenses within a window of time, using a set percentage for payroll costs.
Breon Peace, U.S. Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, FBI New York Field Office Amaleka McCall-Brathwaite, Special Agent-in-Charge, Office of the Inspector General of the U.S. Small Business Administration, Eastern Region Office; and Thomas M. Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the sentence.
“Leon Miles selfishly enriched himself by defrauding a program designed to alleviate the economic suffering caused by the COVID-19 pandemic,” said U.S. Attorney Peace.
“The defendant stole nearly $2 million that was intended to keep struggling businesses afloat and honest workers employed, and he spent those funds on personal luxuries. This office and our agency partners will continue working to bring to justice those fraudsters who try to take advantage of a national emergency, and recover every dollar that they stole from the government.”
“Leon Miles indulged himself at the expense of U.S. taxpayers by both defrauding the Paycheck Protection Program and victimizing those business owners who legitimately needed the benefits. Today’s sentencing is a fair response to Miles’s criminal behavior and he will now face justice behind bars,” said IRS-CI Special Agent-in-Charge Fattorusso.
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