A Pennsylvania man was facing bank fraud and money laundering charges over Paycheck Protection Program loan applications when he submitted another one, U.S. prosecutors said.
A Pennsylvania man who was awaiting trial on charges that he fraudulently received more than $3.8 million in Paycheck Protection Program loans filed an application last month seeking an additional $500,000 in Covid-19 relief money, the authorities said.
In February, federal authorities seized four of the man’s bank accounts where most of the money had been deposited, saying the loan applications were fraudulent. In March, the man submitted a fifth application for a P.P.P. loan, intended to help struggling businesses during the pandemic, and received more than $1.3 million. In April, he was arrested and charged with bank fraud and money laundering.
While he was out on bond, federal officials said, he submitted a sixth loan application.
On Monday, the man, Randy A. Frasinelli, 65, of Carnegie, Pa., was arrested again and charged with another count of bank fraud.
As the coronavirus disrupted the global economy, officials raced to send billions of dollars to businesses on the verge of collapsing, hoping to keep them and their employees afloat. Some saw that as an opportunity to enrich themselves by seeking loans for businesses that did not exist.
Prosecutors in California, Texas and Florida charged three men in separate cases with taking millions of dollars in pandemic relief funds to buy, among other things, Lamborghini luxury vehicles. But even in those cases, the defendants did not continue to pursue federal money for pandemic relief while facing charges of inappropriately taking pandemic relief funds.
Mr. Frasinelli used the federal relief funds to buy a Mustang, a BMW, a Porsche, two Mercedes-Benz S.U.V.s, gold bars, silver coins and other luxury items, according to a pair of affidavits submitted to the U.S. District Court in Western Pennsylvania by a special agent with the Federal Bureau of Investigation. The agent, Sean Langford, wrote that “none of the PPP funds appear to have been used for business expenses or to maintain payroll.”
Efrem M. Grail, a lawyer for Mr. Frasinelli, said on Tuesday evening he had not had an opportunity to review the charges in depth.
The affidavits in Pennsylvania lay out a curious series of events, with loan applications being filed well after law enforcement officials suspected the man filing the loan was doing so fraudulently.
Mr. Frasinelli began his efforts in May 2020 when, according to the affidavits, he began filing four loan applications to the Paycheck Protection Program to help his four companies: Grant-Williams Associates, Grant-Williams Global, Grant-Williams International and Grant-Williams Associates Corporation.
In his LinkedIn profile, which is cited in the affidavits, Mr. Frasinelli described himself as a high-level technology adviser for “advanced technology companies on a global basis working on the development and release of classified technology products that are developed and sold to major defense contractors and defense department in the US, UK, Israel and other (friendly) countries across the globe.”
In response to those loans, two banks gave Mr. Frasinelli a total of $2,545,082, according to the affidavits.
On Feb. 4, law enforcement officials searched Mr. Frasinelli’s home on Lindsay Road, in Carnegie, about eight miles west of downtown Pittsburgh, and seized four bank accounts he used on his loan applications.
Then, on March 2, Mr. Frasinelli submitted another P.P.P. loan, according to the affidavits. On March 13, that loan was approved and Mr. Frasinelli received $1,340,000.
On April 14, Mr. Frasinelli was arrested and charged with bank fraud and money laundering. Afterward he was released on bond. “One condition of his bond was that he not commit any federal, state, or local crimes,” Agent Langford wrote in one of his affidavits.
While out on bond on bank fraud charges over his five prior P.P.P. loan applications, Mr. Frasinelli submitted a sixth loan application, on May 21, seeking $525,000, which federal investigators learned about a month later, while searching open source data on the Small Business Administration website, according to the most recent affidavit. An agent for the Small Business Administration confirmed that the loan was tentatively approved, according to the affidavit.
On Monday, Mr. Frasinelli was arrested, again, and charged with another count of bank fraud. The maximum penalty for a bank fraud conviction is 30 years in prison and a $1 million fine, according to the U.S. attorney’s office. The maximum penalty for money laundering is five years in prison and a $250,000 fine, prosecutors said.
The Paycheck Protection Program is administered by federally authorized lenders who give out loans that the Small Business Administration fully guarantees. The lenders recover the loan not from the applicant, but from the federal government, with which it shares information about the applicant.
It is not immediately clear why the first four loan applications from Mr. Frasinelli were approved. It is also not clear why Mr. Frasinelli was approved for a fifth loan after federal officials began investigating him, nor how his sixth application was tentatively approved after he had been charged by criminal complaint with bank fraud.
Asked if there was any indication that lenders or government officials overseeing the loan program did anything inappropriate in approving Mr. Frasinelli’s loan applications, Margaret Philbin, a spokeswoman for the U.S. Attorney’s Office in the Western District of Pennsylvania, said the office could not comment.
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