Sayreville Man Made Up Company To Get $481K In COVID Money: Feds

SAYREVILLE, NJ — A Sayreville man is accused by the federal government of making up a company of 25 employees, claiming he had monthly payroll expenses of $192,000 and also that he had to pay a mortgage or lease for his business — all so he could fraudulently collect up to $481,502 in pandemic emergency relief money.

Bernard Lopez, 40, of Sayreville, pleaded guilty Wednesday to one count each of bank fraud and theft of government funds, said the New Jersey district U.S. Attorney's office.

The feds say that on June 24, 2020, Lopez submitted a fake Payment Protection Program loan application to a bank on behalf of his company, which the government says was entire fictional.

The federal Small Business Administration oversees the Payment Protection Program, which was designed in the past year to give forgivable loans to small businesses that lost revenue due to the coronavirus pandemic.

On his PPP application, Lopez claimed he had 25 employees, had a monthly payroll expense of approximately $192,000, and also had mortgage/lease and utilities expenses.

He was given $481,502 from the federal government in COVID relief money last summer.

"Company-1 did not, in fact, employ any employees, nor did it incur payroll or utility expenses. Based on Lopez’s misrepresentations, the lender approved Lopez’s PPP loan application and provided Lopez’s purported business with $481,502," said the U.S. Attorney's office.

The feds say Lopez created a corporate bank account in the name of Pezlo Management LLC to receive the check.

The U.S. Attorneys said the check was then altered to be made payable to Pezlo in the amount of $211,886 and was then deposited into Pezlo’s corporate bank account. Lopez later withdrew or transferred the money into his own bank account before the bank could detect the fraud.

Lopez is facing a maximum of up to 30 years in prison, plus a likely fine. Sentencing is scheduled for Oct. 6, 2021.

Applicants for PPP loans applied directly to banks or financial institutions participating in the program; in those applications, applicants make affirmative certifications about their average monthly payroll expenses and number of employees.

PPP funds could be used to pay employees, rent, utilities and interest on mortgages. PPP loans are also entirely forgiven if the recipient spends the loan on those expenses within a designated time period.

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