Two Men Arrested For Fraud Involving Small Business Administration Disaster Funds

BOSTON – A Lawrence man and a Methuen man were arrested yesterday and charged in federal court in Boston in connection with a scheme to use stolen identities to fraudulently obtain disaster loans from the Small Business Administration (SBA) and to launder the funds. 

Darwyn Joseph, 24, of Lawrence, and Ramon Joseph Cruz, 24, of Methuen, were each charged with one count of conspiracy to commit wire fraud and one count of aggravated identity theft. Following initial appearances in federal court, the defendants were detained pending detention hearings scheduled for Dec. 23, 2020.

According to charging documents, the defendants were involved in a conspiracy to use stolen identity information of United States citizens to apply for SBA Economic Injury Disaster Loans. Specifically, Joseph and Cruz used stolen identity information of U.S. citizens to open fraudulent bank accounts, which were then linked to other fraudulent bank accounts set up to receive the SBA funds. Joseph and Cruz also received through the mail some of the debit cards associated with fraudulent bank accounts into which SBA funds were deposited, and then laundered those funds by using them to purchase large numbers of iPhones for re-sale. Some funds were also wired to the Dominican Republic in connection with the scheme.

It is alleged that over $452,204 in SBA funds were fraudulently obtained in connection with this scheme. Approximately $250,000 of this money was used to purchase iPhones in Massachusetts and New Hampshire.

The charge of conspiracy to commit wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000 or twice the gross gain or loss from the offense. The charge of aggravated identity theft carries a mandatory two-year sentence that must run consecutively to any other sentence imposed, up to one year of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and David Magdycz, Acting Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. Assistant U.S. Attorneys Elianna Nuzum and Adam Deitch of Lelling’s Major Crimes Unit are prosecuting the case.

The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of