ALBUQUERQUE, N.M. — A federal grand jury indicted three Albuquerque residents on charges related to COVID-19 fraud as the result of an investigation by Homeland Security Investigations (HSI).
The Phoenix field office of the IRS’ Criminal Investigation division, the Department of Labor’s Office of Inspector General and the U.S. Small Business Administration’s Office of Inspector General assisted with this case.
Jacqueline Rascon-Chacon, Bryan Gardea and Ricardo Landeros face charges of bank fraud, conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, and engaging in monetary transactions in property derived from specified unlawful activity. All three defendants appeared in federal court and will remain on conditions of release pending trial, which has not been scheduled.
According to the indictment, Rascon-Chacon, Gardea and Landeros allegedly obtained more than $1 million in loans and grants from programs authorized by Congress in the Coronavirus Aid, Relief and Economic Security Act by fraudulent means.
The act was intended to provide emergency financial assistance for millions of American small businesses suffering from economic harm caused by the COVID-19 pandemic. These programs included the Paycheck Protection Program and the Economic Injury Disaster Loan program. The Small Business Administration directly paid these loans and grants to eligible small businesses experiencing substantial financial disruptions from the COVID-19 pandemic. Paycheck Protection Program loan applications were processed by participating lenders; lenders funded them using their own funds, with the loans subject to a federal guaranty by the Small Business Administration. Paycheck Protection Program loans were subject to loan forgiveness under certain circumstances.
The indictment charges Rascon-Chacon and Gardea with two counts of bank fraud in relation to two business loans, each for $20,000, that they obtained prior to the COVID-19 pandemic. The indictment alleges that the loan applications they submitted contained false information about the operations of the businesses in whose names the loans were taken out as well as false representations regarding how the proceeds would be used.
The wire fraud conspiracy alleged in the indictment involved Rascon-Chacon, Gardea and Landeros submitting loan applications containing false representations and fabricated supporting documentation to Paycheck Protection Program lenders and the Small Business Administration. The indictment alleges that Rascon-Chacon, Gardea and Landeros submitted loan applications in the names of defunct companies and that the applications included falsified revenue, payroll and employment data as well as fabricated tax documents.
According to the indictment, many of the applications were approved, resulting in loan proceeds being disbursed. Rascon-Chacon, Gardea and Landeros then used these funds for unauthorized expenditures including paying off personal credit card debt, chartering a private jet from Albuquerque to Las Vegas and hiring a mariachi band.
In addition to the wire fraud conspiracy, the indictment alleges a money laundering conspiracy in which Rascon-Chacon, Gardea and Landeros arranged to use loan proceeds to purchase vacant lots of real property in New Mexico, fund the construction of houses on those lots, then sell the properties to home buyers for a profit. The indictment also alleges that Landeros used proceeds of a fraudulently obtained COVID-19 relief loan he obtained in the name of a defunct company to invest in a separate company he owned and operated.
“Homeland Security Investigations continues to bring every asset to bear against opportunistic individuals who sought to exploit the COVID-19 pandemic for their own financial gain,” said HSI El Paso Special Agent in Charge Francisco B. Burrola. “This case exemplifies HSI’s commitment to collaborating with our law enforcement partners to investigate those who would perpetrate such financial schemes during a global health crisis.”
An indictment is only an allegation. A defendant is presumed innocent unless and until proven guilty. If convicted, each of the three defendants faces a maximum penalty of 30 years in prison and a $1 million fine, in addition to asset forfeiture and restitution.
Assistant U.S. Attorney Taylor F. Hartstein is prosecuting the case.
HSI is the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI’s workforce of more than 8,700 employees is comprised of more than 6,000 special agents stationed in 237 U.S. cities and 93 overseas locations in 56 countries. HSI’s international presence represents the largest DHS investigative law enforcement presence overseas and one of the largest in U.S. law enforcement.