“Small businesses have suffered devastating losses during the coronavirus pandemic, and the FBI will not tolerate anyone who steals the funding designed to be a lifeline for those businesses,” said FBI special agent Thomas F. Redford in an announcement of fraud charges against Saugerties resident Jean R. Lavanture, a.k.a. Rudy Lavanture.
Lavanture, 47, is accused of fraudulently obtaining nearly $5 million in government-backed loans meant for businesses struggling with the financial effects of the coronavirus pandemic, according to a press release issued by the US. Attorney’s office for the Northern District of New York. “FBI agents arrested Lavanture Thursday, September 17 at an 8.54-acre estate in New Jersey he is alleged to have bought with fraudulently obtained funds.”
Lavanture allegedly received approximately $4,906,281 between June 16 and July 22, 2020 through the Paycheck Protection Program and economic injury disaster loans. The funds were issued by two banks and the Small Business Administration to five Saugerties-based companies Lavanture controlled, the press release states. The US. Attorney’s office alleges that Lavanture falsely represented that each company had employees, substantial revenues and a payroll, and, the charge states, “he submitted fraudulent tax documents in support of his lies.”
In fact, according to the complaint, none of these companies has ever reported employees to the New York State Department of Labor, nor reported income to the Internal Revenue Service for 2017 through 2019, the press release states.
“The complaint also alleges that Lavanture has improperly used loaned funds to make property purchases and pay personal expenses, further demonstrating his fraudulent intent. According to the complaint, Jean Lavanture stole millions of dollars from important government programs created to help struggling communities during the pandemic. We are on the lookout for fraud, and we will use all available tools to prosecute those who lie, cheat and steal from programs that America’s businesses and their employees so desperately need,” said acting United States Attorney Antoinette T. Bacon.
Law enforcement said it would “continue to aggressively pursue fraudsters seeking to illegally exploit the ongoing coronavirus emergency.”|
The widely used CARES Act authorized forgivable loans to small businesses for job/employee retention and certain other expenses, through the PPP. PPP loan proceeds must be used by the borrowing business only on certain, permissible expenses – specifically, payroll costs, interest on mortgages, rent, and utilities. PPP loans are issued by banks and guaranteed by the SBA.
“The charges in the complaint are merely accusations,” the document states. “The defendant is presumed innocent unless and until proven guilty.”