Rockland Resident Accused Of $1.6 Million COVID-19 Fraud

ROCKLAND COUNTY, NY — Spring Valley resident Elizier Scher faces a charge of wire fraud in connection with a scheme to defraud the U.S. Small Business Administration of more than $1.6 million in COVID-19 relief funds.

The 33-year-old, who prosecutors said spent the funds to pay credit card expenses and buy real estate, was arrested and presented in White Plains federal court on Thursday.

"My Office will continue to investigate and prosecute those who illegally seek to profit from a national emergency," said Damian Williams, the United States Attorney for the Southern District of New York.

The maximum amount of a loan through the Economic Injury Disaster Loan program is determined by a formula based on the date the borrower began operating and the borrower’s gross revenue and cost of goods sold for the twelve months prior to Jan. 31, 2020, prosecutors said. The loans can be used for only working capital and other normal operating expenses. While the loans generally need to be repaid, some borrowers are eligible for up to $15,000 in advances that do not need to be repaid.

Over about a four-hour period July 13, 2020, prosecutors allege, Scher submitted 12 applications for EIDL loans in a principal amount of $150,000 to the SBA over the Internet on behalf of 12 different corporations that he owned and controlled. He requested on each application that the borrower be considered for an advance of up to $10,000 that did not need to be repaid.

Prosecutors allege he lied in each application with respect to each corporation's gross revenue and cost of goods sold for the 12-month period prior to Jan. 31, 2020.

Eleven of the 12 applicants received a net total of $1,648,900 in loan proceeds from the SBA.

Prosecutors said Scher used the proceeds to buy real estate and to pay credit card expenses instead of using it for working capital for the borrowers, as he had agreed to do in the loan agreements he executed.

"The FBI remains committed to bringing to justice those who would aim to serve their own greed at the expense of the government and American taxpayers," FBI Assistant Director-in-Charge Michael J. Driscoll said in the announcement.

If convicted of the wire fraud count, Scher would face a maximum sentence of 20 years in prison.

SEE ALSO:

• FBI: $7.6M COVID Relief Scam Rooted In The Hudson Valley
• Mount Vernon Mother & Daughter Face Federal Charges In $1.6M COVID-19 Scam