Business owners admit PPP fraud

A Wenham man pleaded guilty last week in connection with a scheme to obtain Paycheck Protection Program money by submitting false applications.

James Joseph Cohen, 59, pleaded guilty in federal court in Boston to one count of bank fraud, according to a statement from the United States Attorney’s Office. Cohen was indicted on June 29.

According to the statement, Cohen submitted six false applications to financial institutions and the Small Business Administration between April 2020 and September 2021 to receive pandemic-related aid money on behalf of companies he controlled.

In the filings, Cohen misrepresented the companies’ revenue, the number of people they employed or the amount paid to employees in the 12 months prior to the filing, the statement said. In total, Cohen received nearly $1.2 million in pandemic relief funds based on these false submissions.

Sentencing is scheduled for October 26.

Separately, a Brockton man agreed to plead guilty in connection with a scheme to use false applications to obtain PPP and Economic Injury Disaster Loan Program loans.

Joao Mendes, 59, was indicted in federal court in Boston and agreed to plead guilty to one felony count, the United States Attorney’s Office said in a statement last week.

According to the charging documents, Mendes submitted or caused to be submitted numerous fraudulent PPP and EIDL applications on behalf of various entities beginning in June 2020 and continuing through at least September 2020.

The fraudulent PPP loan applications misrepresented the number of employees and the average monthly payroll costs of Mendes’ various businesses, the statement said. Mendes submitted false tax records to support his loan application. Mendes said he misrepresented the number of employees, gross revenue and cost of goods sold for each business on his EIDL application.

Based on these applications, Mendes and others received more than $1.5 million in PPP and EIDL funding. Once Mendes received the money, the statement passed it on to his personal use, including for the purchase of cryptocurrency; He transferred the money to other accounts he controlled; or transferred the money to other individuals.