Feds: COVID relief funds spent on luxuries

At least six Cincinnati-area business owners are among hundreds nationwide accused of defrauding federal loan programs intended to provide assistance during the COVID-19 pandemic, court records show.

More than 500 people across the country have been charged federally in fraud schemes related to the pandemic, according to the U.S. Department of Justice. As of March, the fraud cases involved attempts to obtain more than half a billion dollars.

The six Cincinnati-area defendants received a total of $1.3 million in loans – most under the federal Paycheck Protection Program (PPP), which was designed to provide money so businesses could keep their employees. The loans are forgiven if recipients meet certain benchmarks.

But the money did not to go to the defendants’ businesses, court documents say.

A man who received more than $350,000 in loans for three different businesses, for example, spent tens of thousands of dollars on a 37-foot yacht and a Mercedes-benz sport-utility vehicle, according to court documents.

And while the businesses existed on paper, some didn’t have the number of employees claimed or any employees, at all. In one case, FBI agents went to an address listed on a loan application, an event planning business in Roselawn. According to the criminal complaint, “there was no signage or storefront, or any evidence that this business ever existed at this location.”

In March, the owner of that event planning business, 51-year-old Faith Hill, received a payment of more than $90,000. Immediately upon receiving the money, court documents say she made numerous cash withdrawals and money transfers to herself.

She also spent money at places including Kroger, Target and Kerry Toyota, the documents say. She paid $3,100 for what appeared to be a luxury rental home in North Carolina, according to the documents.

Although Hill claimed in loan applications to have nine employees, she ultimately told FBI agents that she and her daughter were the only employees. Hill listed the business on different applications as being located in Roselawn and Wyoming.

Also according to the documents, Hill paid Joseph Lentine III – who investigators say helped her and others prepare loan applications – a percentage of two loans she received, totaling nearly $58,000.

Hill has agreed to plead guilty in U.S. District Court in Cincinnati to making false statements on a loan application, court records say.

Hill’s attorney, Richard Goldberg, said “she has accepted responsibility and is fully accountable for her actions.”

Loan applications prepared for others

According to court documents, Lentine is at the center of the case.

Lentine and a woman who worked for him, Angel Strunk, are accused of preparing fraudulent applications for PPP loans for other people in exchange for money. Some of the people they assisted, court documents say, paid up to 50 percent of their PPP loans to Lentine, the documents say.

Lentine also applied for loans of his own, totaling $351,703, under three different business names, according to the documents: “Tri State Org,” “Tri State Corp” and “NY-OH.” He said the businesses had a total of 17 employees, but an FBI agent said in a criminal complaint that the businesses “did not generate the revenue or employ the number of individuals claimed.”

Lentine listed two of the businesses as being in Sedamsville, the third in Avondale. The complaint says he inflated the revenue and payroll in order to receive funds.

In the weeks after receiving one of the loans in June 2020, Lentine made down payments totaling $25,000 for a 37-foot yacht, according to the compliant. He also bought a 2012 Mercedes-benz SUV for $14,975, the complaint says.

In March, after Fifth Third Bank issued a second loan for “NY-OH,” putting nearly $51,000 in Lentine’s account, court documents say there were numerous transactions and purchases indicating fraud.

Purchases were made at businesses including: Chewy.com (a pet supply retailer); Hern Marine (a boat dealer in Fairfield); Four Seasons; and the Sayler Park restaurant, Cabana on the River.

“None of these expenses appear to be consistent with payroll, rent or other permitted expenses under the (federal) program,” the complaint says.

Lentine’s attorney, Brad Moermond, said his client denies the charges.

“Given the nature of the allegations, we are currently reviewing all claims made by the government and hope more facts come to light in the coming months,” Moermond said.

According to the complaint, Strunk also applied for her own loans for three businesses she owned, including one that supposedly offered blogging classes, Next Level Blogging. She told investigators that one year the business generated between $60,000 and $75,000.

In addition, Strunk received $23,000 in unemployment assistance from Ohio, despite being employed full time by Lentine, the documents say.

Her attorney did not respond to an email seeking comment.

The other three facing charges are: Charles Murray, who owned a Cheviot pizza restaurant; Keith Lee, the owner of a development company; and Robert Debaun, who has a handyman business.