What to Know
- The CEO of a payment protection plan lender has been arrested on multiple fraud charges and aggravated identity theft in connection with phony loan and lender applications submitted through the Paycheck Protection Program (PPP), federal prosecutors said.
- Rafael Martinez, 56 and of Franklin Lakes, New Jersey, was charged with one count of bank fraud, two counts of wire fraud, and one count of making false statements to a bank, according to officials.
- Martinez then allegedly used that approval to obtain approximately $932 million in capital to issue PPP loans and earn over about $71 million in lender fees.
The CEO of a payment protection plan lender company has been arrested on multiple fraud charges and aggravated identity theft in connection with phony loan and lender applications submitted through the Paycheck Protection Program (PPP) and using the millions of dollars fraudulently obtained to finance a life of luxury that included a villa in the Dominican Republic, a Ferrari and jets, federal prosecutors said.
Rafael Martinez, 56 and of Franklin Lakes, New Jersey, was charged with one count of bank fraud, two counts of wire fraud, and one count of making false statements to a bank, according to officials.
If convicted, Martinez could spend decades behind bars. Attorney information for Martinez was not immediately known.
According to prosecutors, Martinez used false representations and documents in April 2020 to fraudulently obtain the approval of the U.S. Small Business Administration (SBA) for his company, MBE Capital Partners, LLC, to be a non-bank lender through the PPP.
Martinez then allegedly used that approval to obtain approximately $932 million in capital to issue PPP loans and earn over about $71 million in lender fees.
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According to prosecutors, Martinez used the funds obtained fraudulently to buy luxury items, including a villa in the Dominican Republic, various luxury vehicles -- like a Bentley, Porsche, and Ferrari, among others -- and private jets.
News
“As alleged, Rafael Martinez faked his way into building his company MBE Capital Partners into an almost $1 billion PPP lender," U.S. Attorney Damian Williams said. "Not only did Martinez allegedly lie to a financial institution to obtain almost $300,000 in PPP loan funding for MBE Capital, he then submitted fraudulent financial statements to get the SBA to approve MBE Capital and to obtain over $800 million to issue PPP loans. In doing so, Martinez and his company earned over $70 million in lender fees from the SBA, which among other luxury items, he audaciously spent on a villa in the Dominican Republic, a Ferrari, and private jets.”
Special Agent-in-Charge Thomas Fattorusso, of the Internal Revenue Service, Criminal Investigation Unit, shared similar sentiments, saying in a statement: “American businesses and their employees have been struggling due to an unprecedented global pandemic, and the Paycheck Protection Program was created to serve as a safety net. Martinez is alleged to have fraudulently obtained funds through this program as both a recipient and a lender, and in effect, stole funds from his fellow Americans so he could purchase a New Jersey mansion, a villa abroad, and several luxury vehicles.”
