SAN DIEGO (CNS) - A San Diego woman who falsely claimed to have two employees on the payroll of her marketing company in order to obtain a CARES Act loan pleaded guilty to federal fraud charges, the U.S. Attorney's Office said Wednesday.
Nikole L. Edwards, 40, the founder of Social Savvy Marketing, admitted to submitting fake tax records and payroll information to receive a loan through the Paycheck Protection Program.
The U.S. Attorney's Office said that in April and May, she applied for "tens of thousands of dollars of PPP loans" with three financial institutions, claiming in applications that Social Savvy Marketing had two employees who earned annual salaries of $75,000 and $50,000, when the company actually had no employees.
Edwards provided fake addresses, Social Security numbers and W-2 forms for the nonexistent employees, according to prosecutors, who said that upon being rejected for a loan, she claimed, "This is a lifeline for my employees and my business and we won't survive without it."
She was able to obtain a $19,583 PPP loan, but will have to repay the entire amount as part of the plea agreement.
Edwards entered her plea Tuesday in San Diego federal court and is slated to be sentenced Nov. 18. The charge of making false statements to the Small Business Administration carries a maximum penalty of two years imprisonment and a $5,000 fine, according to the U.S. Attorney's Office.
"The PPP is designed to help struggling businesses meet legitimate payroll obligations, not to enrich sole proprietors engaging in outright fraud," said U.S. Attorney Robert Brewer. "We are working diligently with our law enforcement partners to investigate and prosecute those who abuse this critical lifeline for the nation's businesses, workers and economy."