Steven Goldstein, a San Fernando Valley businessman from California, was arrested on charges of fraud with his business partner Raymond Magana. Goldstein and Magana fraudulently obtained nearly $ 2 million in government-backed loans meant for businesses struggling with the financial effects of COVID-19. The United States Department of Justice reports.
According to the investigation, Goldstein applied for four different loan payments from the Paycheck Protection Program (PPP) totaling more than $ 1.2 million on behalf of two companies, Beagle Real Estate and Antelope Valley Real Estate Development LLC. In doing so, he used fake tax documents, false information about employees and their salaries.
As a result, two of those PPP loans were approved, and Goldstein’s companies received a total of $655,000.
In turn, Magana submitted two applications for PPP payments totaling $ 1.8 million on behalf of The Building Circle LLC, registered in his name.
– To qualify for the PPP loans, Magana allegedly claimed that The Building Circle had 40 employees and submitted to the banks, and later to the Small Business Administration, bogus wage and tax documents that falsely reported $4.5 million in annual employee wages, – the Justice Department said in a statement.
Ultimately, one of two applications for receiving payments from the state was approved for almost $ 1 million.
Magana also applied another application and received a PPP payment of $ 360,000 for another shell company, Forward Builders LLC, also using fake documents.
Later, investigators established that the documents submitted by Magan and Goldstein were fictitious. The relationship between the two suspects was discovered in the documents of Antelope Valley Real Estate Development, where Magan is listed as the company’s CEO, while Goldstein is listed as its manager.
In total, Magana and Goldstein fraudulently received payments of $ 1.95 million.
In addition, on the same day that companies received payments from banks, Goldstein transferred more than $ 350,000 into his personal bank accounts.
Goldstein was taken to the US District Court in Santa Ana on October 29. Magana will be summoned to appear in federal court next month.
If convicted of these charges, Magana and Goldstein each would face a statutory maximum sentence of 127 years in federal prison, according to the Justice Department.