Awaiting ambassador confirmation, Bernie Navarro settles with Federal Reserve bank
As he awaits Senate confirmation to be the U.S. Ambassador to Peru, Miami lender Bernie Navarro has settled a lawsuit brought against him and his company by the Federal Reserve Bank of San Francisco.
While the company, Benworth Capital, declined to disclose the terms of the settlement, Benworth President Henry Jimenez said in a statement that the agreement found no “fault or admission of liability” on the company’s part. He said the company believes the lawsuit was politically motivated, but declined to provide specifics.
The lawsuit was brought against Benworth and Navarro in July 2024 as Navarro’s close friend Secretary of State Marco Rubio was being considered to be President Donald Trump’s pick for vice president.
The Federal Reserve bank declined to comment.
A representative for Navarro referred the Herald to Benworth’s statement.
The Federal Reserve bank brought the lawsuit over credit the bank provided to Benworth that helped fund its prolific lending in the Paycheck Protection Program. Benworth issued more than $4 billion worth of the forgivable small business loans during the COVID-19 pandemic, making it one of the biggest lenders in the program. The company earned more than $680 million in fees from the federal government for its work processing the loans.
The Federal Reserve bank said in the 2024 lawsuit that Benworth was in breach of its contract and demanded immediate repayment of $67 million it said it was owed. The lawsuit, which was filed in Puerto Rico, also named Navarro’s wife, Claudia.
The dispute between the bank and the Navarros was still ongoing when Navarro was formally nominated by President Donald Trump in June to be the ambassador to Peru.
Navarro has not yet appeared before the Senate Foreign Relations Committee, which would vote on whether to advance Navarro’s nomination to the Senate for a confirmation vote. The Senate Foreign Relations Committee had no update on when Navarro’s nomination might be considered by the committee.
The Federal Reserve bank’s 2024 lawsuit was folded into a related dispute between Benworth and a technology company called Womply that Benworth partnered with to process PPP loans.
Under the terms of the agreement between the two companies, Benworth turned over more than two-thirds of the $680 million in fees it earned from the program to the technology company. When an arbitrator ruled last year that Benworth would have to pay Womply $118 million more, Benworth informed the Federal Reserve Bank that it might not have enough money to pay back what it owed.
Benworth and Womply have since settled their dispute.
This week, the Federal Reserve Bank of San Francisco, Benworth and the Navarros informed a judge in Puerto Rico that they had also reached a settlement, but didn’t include the terms.
Jimenez, the Benworth president, said in a statement that the lender was pleased by the resolution of the case.
“Although we cannot disclose the terms of the settlement, we can say that the agreement explicitly states there was no finding of fault or admission of liability relating to the allegations and claims in the Reserve Bank’s Complaint,” Jimenez said. “This result vindicates Benworth Capital, which was the only lender in the program that was the victim of a political lawsuit by the Federal Reserve Bank.”
Benworth was one of several lenders who cooperated with an investigation released in 2022 by the House Select Subcommittee on the Coronavirus Crisis into how online lenders facilitated fraud in the PPP program through lax fraud controls.
Womply, which partnered with Benworth, and another financial technology company called Blueacorn were both suspended by the U.S. Small Business Administration from doing work with the agency as a result of the findings.
The husband and wife co-founders of Blueacorn, Nathan Reis and Jennifer Lockridge, are now both facing the prospect of up to 20 years in prison for their roles in what federal prosecutors alleged was a scheme to fraudulently obtain millions of dollars in PPP funds. Lockridge was convicted by a Texas jury in June of conspiracy to commit wire fraud, while Reis pleaded guilty to the same charge in August.
