A Los Angeles woman has been charged in an alleged $18 million scheme to defraud federal COVID-19 small-business relief programs, the Justice Department announced.
A federal grand jury in the Central District of California indicted Marisela Nuno, 53, on three counts of wire fraud and one count of money laundering. An indictment is an allegation; Nuno is presumed innocent unless proven guilty.
Prosecutors say she sought more than $15.7 million in Paycheck Protection Program funds and more than $2.6 million in Economic Injury Disaster Loan funds. Both programs were created under the CARES Act to keep legitimate businesses afloat during the pandemic.
Court documents allege Nuno filed applications for businesses she claimed to own that contained false statements about employees, payroll, revenues and eligibility. Prosecutors also say she submitted false tax paperwork to support the requests.
DOJ alleges she then used loan proceeds for unauthorized purposes, including buying private property, covering business startup costs and making payments to family members. If convicted, she faces up to 20 years on each wire fraud count and up to 10 years on the money laundering count.
The National Fraud Enforcement Division announced the case with the FBI's Los Angeles Field Office, IRS Criminal Investigation and the Small Business Administration Office of Inspector General. Those agencies investigated the alleged scheme.
The case lands amid years of Republican scrutiny of pandemic-era waste. Sen. Joni Ernst, R-Iowa, has said bureaucrats allowed tens of billions in COVID aid to go out without basic fraud safeguards, leaving legitimate small businesses behind.
CMS Administrator Dr. Mehmet Oz has separately argued that loose COVID spending helped teach fraudsters how easy it was to steal from federal programs. Watchdogs have also flagged large pools of COVID-era unemployment benefits at risk of theft.
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