By: Richard L. Smith
Federal prosecutors have charged a married couple formerly of Piscataway with orchestrating a scheme to fraudulently obtain more than $700,000 in pandemic-era relief funds through the Paycheck Protection Program (PPP).
According to an announcement by Philip Lamparello, Sabrina Mitlo, 41, and Joseph Mitlo, 40, were each indicted on one count of conspiracy to commit bank fraud.
The pair made their initial court appearances on January 20 before James B. Clark III in Newark federal court, where they were released on $100,000 unsecured bonds.
Court filings and statements made during proceedings allege that between May and July 2020, the Mitlos sought and received more than $715,000 in PPP loans on behalf of two New Jersey businesses they claimed to own.
Prosecutors say those businesses had no actual employees or legitimate payroll expenses.
Investigators contend the couple submitted false loan applications asserting that the companies maintained payroll obligations, supported by fabricated tax documents purporting to show prior wage payments.
After the loans were approved and deposited into business bank accounts, the Mitlos allegedly took additional steps to conceal the scheme by using a payroll service to issue checks to supposed employees who did not work for the businesses.
Authorities allege Sabrina Mitlo personally cashed those payroll checks at a check-cashing facility and retained the proceeds.
If convicted, the conspiracy to commit bank fraud charge carries a potential sentence of up to 30 years in federal prison and a fine of up to $1 million, or twice the amount of the financial gain or loss involved, whichever is greater.
The case remains under prosecution in federal court.