Three Southern California residents have pleaded guilty to a PPP loan fraud scheme that exploited COVID-19 pandemic economic relief programs to misappropriate approximately $3.5 million, according to federal prosecutors.
According to the U.S. Attorney’s Office, Daryl D. Knighten Jr. (34) of Perris, Vanessa M. Williams (37) of Corona, and Dennis Mata (36) of Moreno Valley entered guilty pleas regarding the Paycheck Protection Program loan fraud scheme.
Prosecutors stated that between March and August 2021, the defendants submitted fraudulent PPP loan applications using their own names, as well as the names of family members, acquaintances, and recruited individuals.
The applications falsely claimed that the applicants were self-employed and that the loan funds would be used for business purposes. Investigators found that fabricated tax documents were also submitted to deceive lending institutions.
Financial institutions approved the loan applications submitted by the defendants and over 100 co-conspirators. The loan proceeds were deposited into the bank accounts of the defendants and associated individuals, some of whom returned kickbacks to the defendants days after receiving the funds.
Prosecutors noted that the illegally obtained funds were used for personal expenses rather than the business costs permitted under the PPP.
The total losses resulting from this fraudulent operation are estimated at approximately $3.5 million.
Williams and Mata pleaded guilty on the 22nd to one count of wire fraud. Knighten pleaded guilty to the same charge two days later.
Knighten admitted causing at least $145,550 in losses to the PPP loan program, Williams admitted to at least $187,497, and Mata admitted to at least $201,642.
Sentencing hearings for the three defendants are scheduled for January 14, 2027. Under the charges they pleaded guilty to, each faces a maximum sentence of 20 years in federal prison.
Meanwhile, a fourth co-defendant, Mikail G. Hoalim (35) of Moreno Valley, has pleaded not guilty to nine counts of wire fraud. Hoalim’s trial is scheduled to begin on November 9.
