BUFFALO — Federal prosecutors said a Little Valley man has pleaded guilty in a case involving nearly $1 million in fraudulent Paycheck Protection Program funds.
Adam Arena, 44, pleaded guilty before Senior U.S. District Judge William Skretny to charges of conspiracy to commit bank fraud and engaging in monetary transactions with criminally derived proceeds, U.S. Attorney Trini E. Ross announced Tuesday.
The maximum penalty for the crimes is 30 years and a $1 million fine. Sentencing is set for March 2.
Prosecutors reported that Arena reinstated an inactive business, ADA Auto Group, in May 2020 after two years. He then provided information in July 2020 to Amanda J. Gloria. She is accused of submitting a PPP loan application on July 27, 2020, to a financial institution seeking $954,000. Authorities allege she submitted fraudulent supporting documents claiming the company employed 50 people in 2019 with an annual payroll of more than $4.4 million — with an average salary of almost $90,000 each.
Once approved, prosecutors said Arena had the funds wired to a business account under his exclusive control. On Sept. 11, 2020, he paid Gloria around $24,000 for preparing the application. Authorities reported Arena used none of the funds for business expenses.
Prosecutors said charges are pending against Gloria in connection to the investigation.
The investigation was led by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Stephen Belongia and the Internal Revenue Service, Criminal Investigation Division, under the direction of Thomas Fattorusso, Special Agent-in-Charge.
The PPP program, part of the 2020 Coronavirus Aid, Relief, and Economic Security Act, saw $649 billion in assistance allocated to businesses to assist with payroll costs, mortgage interest, rent and utilities.
While most funds from the program were allocated to legitimate business, the Fraud Section of the Department of Justice reported that 100 defendants in more than 70 criminal cases have been prosecuted for fraud. Officials have seized more than $65 million from fraudulently obtained PPP funds, as well as luxury items and real estate bought with the proceeds.
Anyone with general information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via a NCDF Web Complaint Form.
