What you should know
- he CEO of a payment protection plan lender company has been arrested on multiple counts of fraud and aggravated identity theft in connection with bogus loan applications and lenders submitted through the Paycheck Protection Program (or PPP). ), federal prosecutors said.
- Rafael Martinez, 56, of Franklin Lakes, New Jersey, was charged with one count of bank fraud, two counts of wire fraud and one count of making false statements to a bank, according to authorities.
- According to prosecutors, Martinez used the fraudulently obtained funds to purchase luxury items, including a villa in the Dominican Republic, several luxury vehicles (a Bentley, Porsche and Ferrari, among others) and private planes.
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NEW YORK — The CEO of a payment protection plan lending company has been arrested on multiple counts of fraud and aggravated identity theft in connection with false loan applications and lenders submitted through the Paycheck Protection Program. Pago (or Paycheck Protection Program, better known as PPP) and the use of the millions of dollars fraudulently obtained to finance a life of luxury that included a villa in the Dominican Republic, a Ferrari and jets, said federal prosecutors in the city of New York.
Rafael Martinez, 56, of Franklin Lakes, New Jersey, was charged with one count of bank fraud, two counts of wire fraud and one count of making false statements to a bank, according to authorities.
If convicted, Martinez could spend decades behind bars. Information from Martinez’s attorney was not immediately available.
According to prosecutors, Martinez used false representations and documents in April 2020 to fraudulently obtain approval from the U.S. Small Business Administration (SBA) for his company, MBE Capital Partners, to LLC, was a non-bank lender through the PPP.
Martinez then allegedly used that approval to obtain approximately $932 million in capital to issue PPP loans and earn more than $71 million in lender fees.
According to prosecutors, Martinez used the fraudulently obtained funds to purchase luxury items, including a villa in the Dominican Republic, several luxury vehicles (a Bentley, Porsche and Ferrari, among others) and private planes.
“As alleged, Rafael Martinez pretended to turn his firm MBE Capital Partners into a nearly $1 billion PPP lender,” said US Attorney Damian Williams. “Martinez not only allegedly lied to a financial institution to obtain nearly $300,000 in PPP loan funds for MBE Capital, but later submitted fraudulent financial statements to get MBE Capital approved by the SBA and to obtain more than $800 million to issue PPP loans. Al Doing so then, Martinez and his company earned more than $70 million in fees from SBA lenders, which, among other luxury items, he boldly spent on a villa in the Dominican Republic, a Ferrari, and private jets.”
Special Agent in Charge Thomas Fattorusso of the Internal Revenue Service, Criminal Investigation Unit, shared similar sentiments, saying in a statement: “American businesses and their employees have been struggling due to an unprecedented global pandemic, and the Paycheck Protection was created to serve as a safety net. It is alleged that Martinez fraudulently obtained funds through this program as a receiver and as a lender and, in fact, stole funds from his fellow Americans in order to purchase a mansion in New Jersey, a villa abroad, and several luxury vehicles.” .
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