A federal grand jury in San Diego returned an indictment on May 19 charging a California man and woman with conspiracy to commit wire fraud, wire fraud, and money laundering.
According to the indictment, Leronce Suel and Ravae Smith owned Rockstar Dough LLC and Chicken Feed LLC, both of which operated a series of restaurants in the San Diego area. From March 2020 to June 2022 Suel and Smith allegedly conspired to underreport over $1.7 million in gross receipts on Rockstar Dough LLC’s 2020 corporate tax return (From 1120S) filed with the IRS in order to qualify for the COVID-related Paycheck Protection Program and Restaurant Revitalization Funding loans. Suel and Smith also allegedly made materially false certifications on loan applications regarding the use of the money. The indictment charges that Suel and Smith made substantial cash withdrawals from their business bank accounts to launder the fraudulently obtained funds. As part of the conspiracy, Suel and Smith allegedly concealed more than $2.4 million in cash at their residence.
Suel and Smith made their initial court appearance yesterday before U.S. Magistrate Judge William V. Gallo of the U.S. District Court for the Southern District of California. If convicted, they face a maximum penalty of 30 years in prison for wire fraud and conspiracy to commit wire fraud and 10 years in prison for money laundering. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Randy S. Grossman for the Southern District of California made the announcement.
“During an unprecedented public health emergency, the United States provided these loan programs to deliver economic relief to Americans,” said U.S. Attorney Randy Grossman for the Southern District of California. “This office will investigate and prosecute those who exploited the global pandemic to unjustly enrich themselves. We encourage anyone with information regarding individuals who have engaged in COVID-relief fraud to come forward.” Grossman thanked the prosecution team and the investigative agency for their excellent work on this case.
“The CARES act was passed to aid those in need and provide much needed relief during the Covid-19 pandemic. Unfortunately, there are individuals and organizations who took advantage and targeted these programs to steal funds,” said Special Agent in Charge Tyler Hatcher of the Los Angeles Field Office. “Submitting false returns in support of a fraudulent loan application is a crime. IRS-CI is committed to aggressively investigating these crimes and bringing those to justice who stole funds and targeted relief programs during the pandemic.”
The IRS-Criminal Investigation are investigating the case.