LOS ANGELES (KNX) — A Santa Clarita, Calif. man was sentenced Monday to nearly 3.5 years in federal prison for attempting to steal millions of dollars from the Paycheck Protection Program.
Raymond Magana, 41, was ordered to pay $360,415 in restitution for attempting to steal the money via fraudulent PPP COVID-relief loans for his companies that included fake tax documents and information for employees who did not exist, according to the U.S. Attorney's Office.
Magana pleaded guilty in January to submitting PPP loan applications to banks between May and June of 2020, all of which contained false statements about the number of employees and the amount of payroll expenses.
"Specifically, on June 3, 2020, Magana submitted a PPP loan application to Customer’s Bank for $940,416 for The Building Circle LLC, a company registered in his name," the U.S. Attorney's Office said in a statement.
"In that application, Magana falsely claimed the company’s average monthly payroll was $376,167 for 40 workers. Magana admitted to submitting fraudulent tax documents that reported $4,402,000 in annual wages paid to 40 employees in 2019 and $852,000 paid in employee wages during the first quarter of 2020."
In reality, the IRS and California Employment Development Department records never showed any indication of paying employees, according to an affidavit filed with a criminal complaint in the case.
"The actual loss from the two loans that were approved and disbursed was $360,415," officials said.
Steven R. Goldstein, Magana’s business partner, is serving a one-year sentence for fraud in connection with major disaster or emergency benefits, according to the U.S. Attorney's office.
The 37-year-old Northridge resident pleaded guilty in December 2020 to a federal fraud charge and admitted in his plea agreement that he fraudulently obtained $655,000 in PPP loans for his companies by submitting false tax documents and fake employee information.
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