3 From Perth Amboy Admit To $2.1 Million COVID Fraud

PERTH AMBOY, NJ — Two men and one woman from Perth Amboy all pleaded guilty in federal court Wednesday to orchestrating a $2.1 million fraud scheme during the COVID pandemic.

The men are Arlen Encarnacion, 37, and Kent Encarnacion, 30, and the woman is Jacquelyn Pena, 37, all of Perth Amboy.

Federal prosecutors say Arlen Encarnacion submitted 11 fraudulent Paycheck Protection Program (PPP) loan applications and three fraudulent EIDL applications to get COVID loan money from the federal government, all for businesses he made up.

Kent Encarnacion and Pena also submitted fake PPP applications for made-up businesses.

Each application contained lies, including bogus federal tax returns and fabricated information about the number of employees and wages paid. The three were given approximately $2.1 million in federal COVID-19 emergency relief funds meant for distressed small businesses during the pandemic.

The money was given from banks, Federal Home Loan Bank members and the Small Business Administration. Arlen Encarnacion received the bulk of the $2.1 million.

All three are facing prison, with Arlen facing the strictest sentence of up to 10 years in prison. They will be sentenced this winter.

To obtain a PPP or EIDL loan, a qualifying small business was required to apply and provide information on its operations, including the number of employees and expenses. In addition, businesses generally had to provide supporting documentation.