A New Jersey business owner has admitted to his role in a fraud scheme involving COVID funds, fraudulent tax filings, and a fraudulent loan application, U.S. Attorney Philip R. Sellinger announced.
Richard Fadraga, aka Ricardo Fadraga, 53, of Elizabeth, New Jersey, pleaded guilty before U.S. District Judge Michael E. Farbiarz in Newark federal court to an information charging him with one count of wire fraud conspiracy and two counts of wire fraud.
According to documents filed in this case and statements made in court:
In June 2020, Fadraga and a conspirator who was in the business of preparing tax returns submitted a fraudulent application for an Economic Injury Disaster Loan (EIDL), which resulted in the Small Business Administration (SBA) paying $110,000 in COVID-19-related proceeds. In July 2020, Fadraga and the conspirator submitted another fraudulent EIDL application, which resulted in the SBA paying $131,200 in COVID-19-related proceeds.
The July 2020 application was submitted under another person’s name to conceal the involvement of Fadraga and his conspirator, but law enforcement was subsequently able to link the July 2020 application back to the two conspirators.
At the urging of his conspirator, Fadraga also obtained an Employer Identification Number (EIN) and Electronic Filer Identification Number (EFIN) using Fadraga’s personal identifying information. His conspirator then used the EIN and EFIN to submit federal tax returns on behalf of other people that contained false information.
The fraudulent EIN was associated with tax returns that received more than $195,000 in federal refunds for the tax year 2023, and the fraudulent EFIN was associated with tax returns that received more than $595,000 in federal refunds for the tax year 2023, including tax refunds totalling more than $100,000 in the names (including variations of the names) of the conspirator and the conspirator’s associates.
Fadraga also fraudulently applied for a bank loan in connection with the purchase of property in Florida. When the lender requested additional information, Fadraga sent bank statements to his conspirator, who then altered those bank statements to make it appear as if Fadraga’s bank account contained more money than it really did.
Each count of wire fraud conspiracy and wire fraud carries a maximum penalty of 20 years in prison and a maximum fine of $250,000 fine, or twice the gross gain to the defendant or loss to the victim, whichever is greatest. Sentencing is scheduled for February 10, 2025.
