Covid Loan Fraud Tracker: The "Fake Business" Crackdown Continues in NJ

The federal government's years-long campaign to root out pandemic relief fraud is far from over. In fact, prosecutors are still systematically dismantling complex schemes that were set in motion back in 2020.

The latest entry in the Funder Intel Fraud Tracker comes from the District of New Jersey, where a couple has been indicted for allegedly fabricating entire businesses to siphon off EIDL and PPP funds.

The Case File

Defendants: Sabrina Mitlo, 41, and Joseph Mitlo, 40, both formerly of Piscataway, NJ

Charges: Wire fraud, conspiracy to commit wire fraud, and money laundering.

The Scheme (Alleged): This wasn't a case of an existing business padding its payroll numbers. According to the indictment, the scheme was built on a foundation of complete fabrication:

1. Fake Entities: The couple allegedly created non-existent businesses for the sole purpose of applying for relief funds.

2. Falsified Docs: To make these shell companies look legitimate to lenders and the SBA, they allegedly submitted fake federal tax filings and payroll records.

3. The Cash Grab: Through these fraudulent applications, they successfully secured Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans.

4. The Spending: Instead of supporting business operations, the funds were allegedly laundered and used for personal expenses, including a down payment on a home.

Loan Fraud Context

This case highlights a key theme in the DOJ's ongoing enforcement strategy: The statute of limitations is long, and the data trail is eternal.

The initial wave of prosecutions focused on low-hanging fruit: individuals who bought Lamborghinis and homes with PPP money. Now, investigators are mining years of bank records, tax filings, and IP addresses to build cases against more sophisticated, document-heavy schemes.

The message from U.S. Attorney Philip R. Sellinger's office is clear: just because the programs have closed doesn't mean the investigation has.