Buffalo man and Oklahoma woman charged for their roles in a nearly $1,000,000 COVID-19 relief fraud scheme

 

Date: June 14, 2021

Contact: newsroom@ci.irs.gov

Buffalo, NY — A New York man and an Oklahoma woman were arrested and charged by criminal complaint for their roles in fraudulently obtaining and laundering nearly $1 million in funds from the COVID-19 relief Paycheck Protection Program (PPP). Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department's Criminal Division; U.S. Attorney James P. Kennedy Jr. for the Western District of New York; Acting Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) Criminal Investigation; and Special Agent in Charge Stephen Bolongia of the FBI's Buffalo Field Office made the announcement.

According to court documents, from May 2020 through October 2020, Adam D. Arena of Buffalo, NY, and Amanda J. Gloria of Altus, Oklahoma, allegedly conspired fraudulently to obtain and misuse a nearly $1 million PPP emergency relief loan through the U.S. Small Business Administration (SBA). Arena and Gloria allegedly submitted a false loan application to an SBA approved participating lender on behalf of a defunct business owned by Arena called ADA Auto Group LLC. This loan application allegedly contained materially false representations and certifications about Arena's business and how the loan would be used. After fraudulently obtaining the loan, Arena and Gloria are alleged to have misused the loan proceeds on personal expenses including the purchase of two cars.

Arena is charged with one count of conspiracy to commit bank fraud, one count of conspiracy to engage in monetary transactions with criminally derived proceeds, one substantive count of bank fraud, and three substantive counts of engaging in monetary transactions with criminally derived proceeds. Gloria is charged with one count of conspiracy to commit bank fraud, one count of conspiracy to engage in monetary transactions with criminally derived proceeds, one substantive count of bank fraud, and one substantive count of engaging in monetary transactions with criminally derived proceeds. If convicted, Arena and Gloria each face a maximum penalty of 30 years in prison for each conspiracy and substantive count of bank fraud, and a maximum of 10 years in prison for each conspiracy and substantive count of engaging in monetary transactions with criminally derived proceeds.

The IRS-CI and FBI are investigating the case. Trial Attorney Cory E. Jacobs of the Criminal Division's Fraud Section and Assistant U.S. Attorney Laura A. Higgins of the U.S. Attorney's Office for the Western District of New York are prosecuting the case.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, 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 up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on payroll expenses.

The Fraud Section leads the Department of Justice's prosecution of fraud schemes that exploit the CARES Act. In the months since the CARES Act was passed, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $65 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real-estate properties and luxury items purchased with such proceeds.

A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.