A federal grand jury has indicted a Sedona man and three people from California in a fraud to steal COVID-19 relief money.
Forty-three year old Eric Karnezis is accused of working with three associates to submit at least 1,300 fraudulent Paycheck Protection Program applications to obtain money meant for small businesses. Prosecutors say the defendants tried to get $178 million and approximately $105 million in loans were funded as a result of false payroll information and tax documents.
Karnezis has entered a not guilty plea. Co-defendants are Lynisha Wells, 47, and Nikkia Bennett, 43, both of Chula Vista, California, and Frederico Williams, 48, of San Diego.
The Paycheck Protection Program for small businesses provided loans that were essentially only required to be paid back if businesses violated tenants of the program. The Small Business Administration required businesses to fill out a form to request loan forgiveness. An NPR analysis found of the 11.5 million PPP loans issued, about 73,000 were repaid without requesting forgiveness — just sixth-tenths of a percent.
