Edina Man Indicted in $975,000 Covid Fraud Scheme

MINNEAPOLIS - Mark Erjavec, 49, was indicted on five counts of wire fraud, announced Acting U.S. Attorney Joseph H. Thompson. Erjavec, of Edina, Minnesota, fraudulently obtained and stole more than $975,000 in Covid-19 relief funds. Erjavec made his initial appearance in federal court today.

"Erjavec stole nearly $1 million in government dollars meant to keep small businesses alive during the pandemic," said Acting U.S. Attorney Joseph H. Thompson. "When Minnesotans were struggling to keep their doors open and pay their workers, Erjavec lined his own pockets. Fraud that exploits a crisis is especially shameful."

In the wake of the Covid-19 pandemic, Mark Erjavec, devised and executed a scheme to defraud federal Covid-19 relief programs to enrich himself. Specifically, Erjavec took advantage of programs created to provide a financial lifeline to small businesses during the pandemic. Erjavec took funds intended for struggling businesses by resurrecting shell entities and submitting false applications.

Specifically, Erjavec reactivated dormant business entities for use in his scheme. From the mid-1990s until the early 2000s, Erjavec owned nine businesses that were registered in Minnesota. Those companies included Tricolor Heron, LLC, Mesaba Finance - Law, LLC, Mesaba Finance - Summit, LLC, among others. Each of these entities were administratively dissolved by the Minnesota Secretary of State between 2008 and 2013.

From April 2020 to August 2020, Erjavec reactivated these dormant business entities and used them to submit fraudulent Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) applications to the Small Business Administration (SBA). In those submissions, Erjavec overstated revenues, claimed nonexistent employees, and attached fabricated IRS tax forms to lend the appearance of legitimate business activity. Erjavec often opened new checking accounts for the shell entities on the same day (or within days) of registering the business.

As a result of his fraud scheme, Erjavec obtained more than $975,000 in Covid-19 relief funds. Erjavec stole that money, which he wired into accounts he controlled exclusively. Erjavec used the money for his own personal benefit and spending.

"As alleged in the indictment, Mark Erjavec knowingly submitted false and fraudulent documents to the Small Business Administration in order to take money intended for legitimate small businesses suffering during the Covid-era economic downturn," said Minneapolis FBI Special Agent in Charge Alvin M. Winston Sr. "Erjavec re-registered dormant business entities in order to facilitate the theft of more than $975,000 in taxpayer dollars. Our efforts to stop this egregious fraud are moving forward full speed ahead; we will work with our partners at the Small Business Administration and the U.S. Attorney's Office to hold accountable those who illegally enrich themselves by defrauding the government."

This case was the result of an investigation conducted by the Office of Inspector General - U.S. Department of Commerce and the FBI, as a part of the Pandemic Response Accountability Committee (PRAC) Task Force, established to promote transparency and facilitate coordinated oversight of the federal government's COVID-19 pandemic response.

Assistant U.S. Attorney Bradley M. Endicott is prosecuting the case.

An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.