Hyattsville Resident Pleads Guilty to Participating in COVID-Relief Fraud Scheme

Greenbelt, Maryland - A Maryland woman pled guilty in federal court, today, for her role in a scheme to fraudulently obtain more than $2.3 million in Paycheck Protection Program (PPP) funds.

Carmen Hernandez, 49, of Hyattsville, pled guilty to one count of conspiracy to commit wire fraud in connection with the scheme. This prosecution is part of the Trump Administration's Task Force to Eliminate Fraud.

Kelly O. Hayes, U.S. Attorney for the District of Maryland, announced the guilty plea with Special Agent in Charge Jimmy Paul, FBI Baltimore Field Office, and Special Agent in Charge Brian Tucker, Federal Reserve Board Office of Inspector General (FRB-OIG).

The Coronavirus Aid, Relief, and Economic Security (CARES) Act - a federal law enacted in March 2020 - provided emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. It authorized up to $659 billion in forgivable loans to small businesses for employee retention and certain business expenses through the Paycheck Protection Program (PPP), which was administered by the Small Business Administration (SBA). The business must use PPP loan proceeds on payroll costs, mortgage interest, rent, and utilities.

According to her guilty plea, in 2014, Hernandez and her co-conspirators opened a tax-preparation business, Integrated Multi Services Inc. (IMS), in Silver Spring, Maryland, that they registered under Hernandez's name. Beginning in May 2020, and continuing until at least May 2023, Hernandez and her co-conspirators knowingly and willfully engaged in a scheme to fraudulently obtain PPP loans guaranteed by the SBA.

As part of the scheme, Hernandez solicited IMS clients and others to use IMS's services to apply for PPP loans. Hernandez also instructed PPP-loan applicants about what documents they needed to provide IMS in support of their PPP-loan applications. One of Hernandez's co-conspirators submitted PPP loan applications that contained false information and fabricated supporting documents, including tax documents and business records to obtain larger loans for their clients. In some cases, the PPP-loan applications listed businesses that did not exist in any legitimate capacity. Hernandez and her co-conspirators then charged borrowers kickbacks based on a percentage of the funds received.

In total, Hernandez and her co-conspirators caused the submission of at least 120 fraudulent PPP-loan applications on behalf of at least 80 PPP loan borrowers, resulting in at least $2.3 million in fraudulent PPP loans.

Additionally, as she admitted in her guilty plea, Hernandez caused the submission of two false PPP-loan applications for herself. These loans, submitted in June 2020, and March 2021, contained multiple material representations and were supported by fabricated tax documents. As a result of these fraudulent PPP-loan applications, Hernandez obtained $37,224 in PPP funds that she was not eligible to receive.

Hernandez is facing up to 20 years in federal prison for conspiracy to commit wire fraud. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district judge determines sentencing after considering the U.S. Sentencing Guidelines and other statutory factors.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division ("Fraud Division"). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

U.S. Attorney Hayes commended the FBI and FRB-OIG for their work in the investigation. Ms. Hayes also thanked Assistant U.S. Attorneys Bijon A. Mostoufi and Alex P. Treiger who are prosecuting the case.

For more information about the Maryland U.S. Attorney's Office, its priorities, and resources available to report fraud, please visit justice.gov/usao-md and justice.gov/usao-md/report-fraud.

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