A Riverside County man pleaded guilty earlier this week – the third defendant to plead guilty this week – to fraudulently obtaining COVID-19 business-relief loans and then helping others fraudulently obtain COVID business loans in exchange for a cut of the illicit proceeds, causing a total loss to taxpayers of approximately $3.5 million.
Daryl D. Knighten, Jr., 34, of Perris, pleaded guilty to one count of wire fraud.
Two co-defendants pleaded guilty on Tuesday to one count of wire fraud for their roles in the scheme: Vanessa M. Williams, 37, of Corona, and Denise Mata, 36, of Moreno Valley. Their sentencing hearings are scheduled for January 14, 2027.
Under their plea agreements, from March 2021 to August 2021, Knighten, Williams, and Mata submitted fraudulent Paycheck Protection Program (PPP) loans for themselves, family members, close associates, and people they recruited. Congress created the program in 2020 to assist businesses dealing with COVID-19’s severe economic impact.
The defendants lied to the United States Small Business Administration (SBA) and banks in connection with the fraudulent PPP loan applications. Each application falsely stated that the PPP loan applicant was self-employed and falsely certified that each loan would be used for permissible business purposes. Each loan application also contained fraudulent tax forms to deceive the SBA and PPP participating lenders into disbursing loan funds.
Lenders approved PPP loans for the defendants and more than 100 co-schemers. The lenders then disbursed the PPP loan funds into bank accounts belonging to the defendants and their co-schemers. Co-schemers paid kickbacks to the defendants within days of receiving the fraudulently obtained PPP loan funds.
Knighten, Williams, Mata, and their co-schemers used the illicitly obtained money for their own personal benefit and not for expenses allowable under the PPP. The defendants also submitted fraudulent documents to the SBA and lenders to obtain loan forgiveness for the illegally obtained PPP loans.
Knighten admitted to causing at least $145,550 in losses to the PPP loan program. Williams and Mata admitted to causing losses of at least $187,497 and $201,642, respectively.
Federal prosecutors believe the total loss resulting from this scheme is approximately $3.5 million.
United States District Judge Kenly Kiya Kato has scheduled a January 14, 2027, sentencing hearing for Knighten, who, like Williams and Mata, will face a statutory maximum sentence of 20 years in federal prison.
Co-defendant Mikhail G. Hoalim, 35, of Moreno Valley, has pleaded not guilty to nine counts of wire fraud and is scheduled to go to trial on November 9 for his alleged role in this scheme.
As part of the Pandemic Response Accountability Committee (PRAC) Task Force, this investigation was conducted by the Amtrak Office of Inspector General with support from Homeland Security Investigations. The PRAC was established to promote transparency and facilitate coordinated oversight of the federal government’s COVID-19 pandemic response. This case was also supported by the PRAC’s Pandemic Analytics Center of Excellence, which applies the latest advances in analytic and forensic technologies to help offices of inspectors general and law enforcement pursue data-driven pandemic relief fraud investigations.
Assistant United States Attorney Eric L. Mackie of the Major Crimes Section and Senior Litigation Counsel Gary Bell and Trial Attorneys Andrew Schupanitz and Phil Huynh from the Department of Justice’s Antitrust Division are prosecuting this case.
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