MIAMI – Daniel Hernandez, 51, a former South Florida regional manager for a leading national bank has been sentenced to 120 months in prison for participating in a conspiracy to defraud the Paycheck Protection Program (PPP) out of loan proceeds. These loans are guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act.
Hernandez conspired with Erich Alfonso Barata, Armando De Leon, and others to submit over 90 fraudulent PPP loan applications. The applications were primarily submitted to two banks, Hernandez’s employer at the time, and his previous employer, another leading national bank.
Hernandez also conspired to submit fraudulent Economic Injury Disaster Loan applications through the SBA, but most of the applications were declined.
Hernandez and his co-conspirators attempted to defraud the PPP and EIDL programs out of approximately $25 million. The conspiracy caused approximately $15 million in losses. The investigation has recovered over $800,000 so far.
Daniel Hernandez pled guilty on December 21, 2022, to one count of conspiracy to commit wire fraud. De Leon and Alfonso Barata previously pled guilty for their roles in the conspiracy. De Leon was sentenced to 60 months’ imprisonment on February 21. Alfonso Barata is scheduled to be sentenced on April 18.
U.S. Attorney Markenzy Lapointe for the Southern District of Florida; Special Agent in Charge Kyle A. Myles, Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Atlanta Region; acting Special Agent in Charge Maged Behnam of the FBI, Miami Field Office; and Special Agent in Charge Amaleka McCall-Brathwaite, Small Business Administration, Investigations Division’s Eastern Region (SBA-OIG), announced the sentence imposed by U.S. District Judge K. Michael Moore.
FDIC-OIG, FBI Miami, and SBA-OIG investigated the case, with assistance from the Florida Department of Revenue. Assistant U.S. Attorney Eli S. Rubin is prosecuting the case. Assistant U.S. Attorney Joshua Paster is handling asset forfeiture.
In March 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted. It was designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. Among other sources of relief, the CARES Act authorized and provided funding to the SBA to provide Economic Injury Disaster Loans (“EIDLs”) to eligible small businesses, including sole proprietorships and independent contractors, experiencing substantial financial disruptions due to the COVID-19 pandemic to allow them to meet financial obligations and operating expenses that could otherwise have been met had the disaster not occurred. EIDL applications were submitted directly to the SBA via the SBA’s on-line application website, and the applications were processed and the loans funded for qualifying applicants directly by the SBA.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
On September 15, 2022, the Attorney General selected the Southern District of Florida’s U.S. Attorney’s Office to head one of three national COVID-19 Fraud Strike Force Teams. The Department of Justice established the Strike Force to enhance existing efforts to combat and prevent COVID-19 related financial fraud. For more information on the department’s response to the pandemic, please click here.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
An indictment contains mere allegations, and all defendants are presumed innocent unless and until proven guilty in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case numbers 22-cr-20529 (Hernandez), 22-cr-20420 (De Leon), and 22-cr-20487 (Alfonso Barata).
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