Lazaro Verdecia Hernandez, a 37-year-old Miami resident, has been sentenced to 15 years in federal prison. Hernandez was found to have led a scheme involving fraudulent loans taken under the Paycheck Protection Program (PPP) and the laundering of its proceeds.
Hernandez, alongside co-conspirator Heidi Cid, submitted more than 63 fraudulent PPP loan applications. These applications falsely increased companies' employee counts and included forged documents, resulting in over $14.5 million being disbursed to accounts controlled by collaborators. These individuals reportedly withdrew the funds and distributed the money among Hernandez, Cid, and an additional conspirator, Yadier Rodriguez Arteaga.
In previous hearings, Arteaga and Cid were convicted and sentenced to federal prison terms of nearly six years and 26 months, respectively.
The sentence was announced by U.S. Attorney Hayden P. O’Byrne for the Southern District of Florida with key federal partners. Special Agents in Charge, including Rafael Barros from the U.S. Secret Service, Edwin S. Bonano from the Federal Housing Finance Agency, and Amaleka McCall-Brathwaite from the U.S. Small Business Administration Office of Inspector General, contributed to the announcement.
Investigation of the case involved the U.S. Secret Service, the FHFA OIG, and the SBA OIG, with Assistant U.S. Attorneys Thomas Haggerty and Eli Rubin leading the prosecution. Asset forfeiture tasks were managed by Assistant U.S. Attorney Sarah Klco.
Several related cases were brought forward, revealing a larger conspiracy with approximately 22 people charged and convicted. Most pled guilty, though two suspects, Javier Pico and Erisbel Gonzalez Gomez, remain at large.
This fraud ties back to the March 2020 CARES Act, legislated for financial relief to Americans suffering economic challenges due to the COVID-19 pandemic. Part of this act included the PPP funded by the Small Business Administration to aid small businesses.
Efforts to combat pandemic-related fraud were reinforced by the establishment of the COVID-19 Fraud Enforcement Task Force by the Attorney General in May 2021. This task force collaborates with numerous government bodies to address fraud and misuse of pandemic relief funds.
The Southern District of Florida’s U.S. Attorney’s Office leads one of three national COVID-19 Fraud Strike Force Teams. This initiative aims to fortify existing measures to prevent COVID-19 financial fraud.
Individuals with information on potential pandemic-related fraud can report through the Department of Justice’s National Center for Disaster Fraud Hotline or Web Complaint Form.
For updates, the United States Attorney’s Office for the Southern District of Florida’s website provides ongoing details on this case. Related court information is available on the Southern District of Florida’s District Court website.