33 Months In Prison For Perth Amboy Man Who Ran COVID Loan Scam
PERTH AMBOY, NJ — A Perth Amboy man will spend 33 months in prison for running a fraud that scammed more than $2.1 million in Paycheck Protection Program loans after the pandemic.
Paycheck Protection Program (PPP) loans were meant to help small businesses recover after the coronavirus pandemic.
Arlen Encarnacion, 38, ran the scam with another man and a woman, all of Perth Amboy. All three have now pleaded guilty to conspiracy to commit wire fraud and money laundering. However, the others, Jacquelyn Pena, 38, and Kent Encarnacion, 30, were each sentenced to probation.
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Arlen is the only one of the three who got jail time.
Federal prosecutors say he submitted 11 fraudulent PPP loan applications and three other fraudulent federal loan applications, for businesses that he made up or did not exist.
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Kent Encarnacion helped submit one of the fraudulent PPP applications, and Pena helped submit three of the other fraudulent PPP applications.
Each application contained lies, including bogus federal tax return documentation and made-up numbers as to the number of employees and wages paid. Based on these alleged misrepresentations, lenders, Federal Home Loan Bank members, and the Small Business Administration collectively provided the purported businesses with approximately $2.1 million in federal COVID-19 emergency relief funds meant for distressed small businesses.
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