A Camden County man today admitted conspiring to fraudulently obtain COVID-19 relief funds, fraudulently obtaining unemployment benefits, and illegally possessing a firearm, U.S. Attorney Philip R. Sellinger announced.
According to U.S. Attorney Sellinger, Stephen Bennett, 46, of Berlin, New Jersey, pleaded guilty to an information charging him with bank fraud conspiracy, wire fraud and being a felon in possession of a firearm.
According to documents filed in this case and statements made in court:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted in March 2020 and was designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.
One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through a program referred to as the Paycheck Protection Program (PPP).
The CARES Act also authorized the Small Business Administration to provide Economic Injury Disaster Loans (EIDLs) of up to $2 million to eligible small businesses that were experiencing substantial financial disruption due to the COVID-19 pandemic.
To obtain a PPP or EIDL loan, a qualifying small business was required to apply and provide information on its operations, including the number of employees and expenses. In addition, businesses generally had to provide supporting documentation.
The CARES Act also created a new temporary federal unemployment insurance program called Pandemic Unemployment Assistance (PUA), which provided unemployment insurance benefits for individuals who were not eligible for other types of unemployment (the self-employed, independent contractors, gig economy workers).
The CARES Act also created a new temporary federal program called Federal Pandemic Unemployment Assistance (FPUC) that provided an additional $600 weekly benefit to those eligible for PUA and regular unemployment insurance benefits.
In 2020, Bennett conspired with Rhonda Thomas to submit one PPP application and one EIDL application for a company controlled by Bennett.
The applications stated that the company had 16 employees, gross revenues of $1.73 million, and an average monthly payroll of $144,000, when in fact, the company had no employees, revenue, or payroll.
Bennett and Thomas also submitted forged tax forms and altered bank statements as part of the PPP loan application.
Based on the misrepresentations, the loans were approved in the amount of $510,000. Bennett paid kickbacks of over $150,000 to Thomas and used the rest of the fraudulently obtained PPP and EIDL loan proceeds to pay for personal expenses, including jewelry and vehicles.
Also, in 2020, Bennett defrauded the Pennsylvania Department of Labor by submitting 74 unemployment insurance claims in the names of other individuals.
Bennett falsely stated on that the applicants were self-employed and unemployed because of COVID-19. Benefits of $425,339 were paid to Bennett as a result of the fraudulent claims he submitted.
In May 2021, law enforcement officials executing a search warrant at Bennett’s home found a .9 millimeter semiautomatic pistol with no serial number (commonly referred to as a “ghost gun”) and a magazine loaded with 16 rounds of ammunition.
Thomas previously pleaded guilty to bank fraud conspiracy and money laundering and is awaiting sentencing.