Hialeah trio faces prison after ripping off $14.5 million from pandemic loan program
Two months after Congress approved lending billions to businesses during the COVID-19 pandemic, a Hialeah-based ring hatched an elaborate plot using a dozen ineligible companies to cash in on the easy-to-get government loans.
Calling the shots were Heidi Cid, Lazaro Verdecia Hernandez and Yadier Rodriguez Arteaga, according to federal prosecutors. They submitted 147 fabricated Paycheck Protection Program loan applications between May and July of 2020. Private lenders approved 64 of their applications and distributed $14.5 million to the bank accounts of 18 associates behind the unqualified companies, according to court records.
In return, the associates kicked back up to half of the PPP loan proceeds to Cid, Verdecia and Rodriguez via cash, checks and wire transfers.
Now, the trio is facing several years in prison after being convicted in Miami federal court of conspiracy and fraud charges stemming from their scheme to rip off the PPP loans, which were guaranteed by the federal Small Business Administration. Under the emergency relief program, the loans were usually forgiven by the SBA if used for payroll and other overhead.
Most of the trio’s associates have also been convicted through plea agreements, although two suspects are fugitives.
South Florida a hot spot for PPP fraud
In a region that sticks out for its sheer number of PPP loan-fraud prosecutions — more than 250 defendants charged since the pandemic struck in March 2020 — the Hialeah-centered racket stands out for its size and scope. But while Cid, Verdecia and Rodriguez pocketed much of the illicit money, they spent it on themselves and real estate — not on a Lamborghini or other exotic foreign cars, like many PPP loan offenders.
READ MORE: Lambos. Jewels. How ‘easy money’ from Uncle Sam made Miami a feast for PPP fraudsters
Cid, 55, who ran her business, Mi Casa, Your Home, out of her Hialeah residence, cut a plea deal in April. She testified against Verdecia and Rodriguez at their trial this month, and now faces up to five years in prison at her sentencing on Dec. 5 before U.S. District Judge Robert Scola.
Cid must also forfeit $541,181 in fraudulent PPP loan proceeds, along with two real estate properties in the Hialeah and Richmond Heights areas, according to her plea agreement with prosecutors Thomas Haggerty and Eli Rubin in the U.S. Attorney’s Office in Miami.
False banking and tax records
Cid, at the direction of Verdecia, submitted the PPP loan applications with false banking and tax forms, while inflating the number of employees and payroll of each company, according to a factual statement filed with the agreement.
Verdecia, Arteaga and others recruited associates from a dozen businesses, including Miami-Dade body shops, towing firms and construction companies, which acted as fronts for the fabricated loan applications.
Cid, Verdecia and Arteaga “knew that the loans contained false employee and payroll information and forged documents and that the loans were fraudulently obtained,” Cid’s factual statement says. “The co-conspirators that received the fraudulent loans also knew that the funds were fraudulently obtained.”
Verdecia, 37, and Rodriguez, 41, were found guilty on Nov. 8 by a Miami federal jury on charges of conspiracy to commit wire fraud and money laundering. The pair, who also must repay their ill-gotten loan proceeds and forfeit real estate, face up to 20 years in prison at their sentencing hearing on Feb. 3.
