An El Paso woman admits she defrauded more than $2 million from COVID relief programs designed to assist small businesses during the pandemic.
According to the US Department of Justice, 47-year-old Araceli Benitez pled guilty in federal court on Wednesday to two counts of Paycheck Protection Program (PPP) fraud, one count of wire fraud, and one count of false, fictitious, or fraudulent statements to the IRS.
Benitez has not been sentenced, but the DOJ has stated that she faces up to 30 years in prison for wire fraud and up to five years for false claims. A federal district court judge will eventually decide her sentence.
According to court filings, Benitez did this:
She owned and operated Garaas Insurance Tax Services (GITS) and Ashley Home Care Services (AHH) from a storefront in El Paso.
Through such enterprises, Benitez assisted several other businesses in obtaining PPP loans from the federal government, charging clients a percentage of the loan amount.
However, in at least one instance, Benitez obtained income tax information from a client for the purpose of a PPP loan application, then created and filed a fraudulent Form 1040 that had figures that differed from the customer’s genuine Form 1040. The Form 1040 submitted by Benitez for the PPP loan application also lacked her client’s signature. Furthermore, the client’s signature on the loan application was falsified, and the client did not review the application before Benitez submitted it. Benitez invoiced the client $6,000 for her services in creating the PPP loan application, which she put into the GITS bank account.
Furthermore, Benitez gave inaccurate information to the IRS on Form 941, Employer’s Quarterly Federal Tax Return.
On July 12, 2022, Benitez filed the form, claiming to have paid many employees more than she had really paid. As a result of the inaccurate information, Benitez obtained a $52,267.92 tax refund.
The officials who prosecuted and investigated the case made the following remarks:
“The Paycheck Protection Program was designed to help American small businesses survive the economic crisis that was the COVID era,” said U.S. Attorney Simmons. “Araceli Benitez saw that as an opportunity to enrich herself through an illegal fraud scheme. Fraud against federal programs is a selfish crime against every taxpaying American. Like many other convicted fraudsters who have faced the consequences, Benitez must be held accountable.”
“The Paycheck Protection Plan (PPP) loans were a resource to assist the American people and their small businesses in a time of uncertainty, instead Ms. Benitez used deceptive practices to exploit a government program for her own personal gain” said Coult W. Markovsky, Acting Special Agent in Charge of the FBI El Paso Field Office. “The FBI will continue to work with our partners to identify and investigate anyone who tries to defraud federal government programs in this way.”
“Benitez filed fraudulent tax returns using a refundable tax credit called the employee retention credit. When criminals use a refundable tax credit on their tax returns, the fraud can turn into a tax refund, which is stealing from every tax payer,” said Special Agent in Charge Christopher J. Altemus Jr., of IRS Criminal Investigation’s Texas Field Office. “IRS-CI initiated more than 560 investigations, involving more than $5.61 billion of potentially fraudulent employee retention credits. We are returning the money back to the Treasury where it can help take care of the needs of all taxpayers.”
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