header image

[Sign Up Now] to Receive Our FREE Daily SCVTV-SCVNews Digest by E-Mail

Inside
Weather
Santa Clarita CA
Cloudy
Cloudy
50°F
 
Calendar
Today in
S.C.V. History
March 3
1882 - George Campton's Newhall general store explodes [story]
general store


SANTA ANA – A Santa Clarita man and his Northridge-based business partner were arrested on federal charges Thursday in a relief fraud case alleging the two fraudulently obtained more than $1.95 million in Paycheck Protection Program loans.

Raymond Magana, 39, of Santa Clarita, and his business partner Stevan R. Goldstein, 36, of Northridge, were named in a federal criminal complaint charging them with making false statements to the government, fraud in connection with major disaster or emergency benefits, wire fraud, bank fraud, conspiracy, and false statements to the Small Business Administration.

They are accused of submitting fake tax documents and false employee information, and then transferred hundreds of thousands of dollars of the funds into their personal bank accounts.

Goldstein was arrested Thursday morning and was expected to make his initial appearance that afternoon in United States District Court in Santa Ana. Magana will be summonsed to appear in federal court next month.

According to an affidavit in support of the complaint, on May 13 and June 3, Magana submitted two applications for PPP loans totaling $1.8 million to U.S. Bank and Customer’s Bank, on behalf of The Building Circle LLC, a company registered in his name.

To qualify for the PPP loans, Magana allegedly claimed that The Building Circle had 40 employees and submitted to the banks, and later to the SBA, bogus wage and tax documents that falsely reported $4.5 million in annual employee wages.

Both IRS and California Employment Development Department records showed that the company never reported paying any employees, and the underwriting packet also did not include a list of employees or associates for the company, according to the affidavit. Investigators later determined that the Pico Rivera address given as The Building Circle’s headquarters was a 980-square-foot, single-family home that appeared to be a residence, not a business. Ultimately, one of the two loan applications was approved and $940,416 was funded to Magana’s shell company, the affidavit states.

Magana allegedly also applied for and received a PPP loan of $360,415 for Forward Builders LLC, another shell company, using fake tax documents and false employee information, and falsely claiming $1.73 million in employee wages.

When a bank manager contacted Magana after one of the business accounts receiving PPP funds had been frozen because of suspicious activity, he allegedly told the bank “We have all the documents, we got approved,” and he refused to return the improperly obtained PPP funds, the affidavit states.

The affidavit further alleges that Goldstein applied for four different PPP loans to Bank of America totaling more than $1.2 million on behalf of two other companies, Beagle Real Estate and Antelope Valley Real Estate Development LLC, while also using fake tax documents and false employee information.

Two of those PPP loans ultimately were approved and Goldstein’s companies received a total of $655,000 in PPP loan funds, the affidavit details. California state business records list Magana as CEO of Antelope Valley Real Estate Development, while Goldstein is listed as its manager.

According to the affidavit, on the same day that the banks issued those PPP loan funds to Goldstein’s companies, Goldstein transferred more than half of that amount, $355,000, into his personal bank accounts.

In total, Magana and Goldstein applied for more than five separate PPP business loans totaling more than $2.5 million from various banks, of which more than $1.95 million was issued, according to the affidavit.

A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

If convicted of these charges, Magana and Goldstein each would face a statutory maximum sentence of 127 years in federal prison.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized more than $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

This relief fraud matter was investigated by IRS Criminal Investigation and the Small Business Administration – Office of Inspector General. The FBI assisted with today’s arrests.

Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office is prosecuting this relief fraud case.

Comment On This Story
COMMENT POLICY: We welcome comments from individuals and businesses. All comments are moderated. Comments are subject to rejection if they are vulgar, combative, or in poor taste.
REAL NAMES ONLY: All posters must use their real individual or business name. This applies equally to Twitter account holders who use a nickname.

1 Comment

  1. Leticia Hinojosa says:

    Crooks! They are hurting those who truly need it!!!

Leave a Comment


SCV NewsBreak
LOCAL NEWS HEADLINES
Tuesday, Mar 2, 2021
Hart District Announces Outdoor Sports Practices, Competitions to Resume Immediately
After receiving athletic protocol updates from the California Department of Public Health (CDPH), the Los Angeles Department of Public Health (LADPH) and California Interscholastic Federation (CIF), the William S. Hart Union High School District has put together a complete athletic program following all state and county guidelines.
Tuesday, Mar 2, 2021
NASA Selects Three Hart District Teachers for SOFIA Flight
Three teachers from the William S. Hart Union High School District have been named by NASA and the SETI Institute to fly on NASA’s Stratospheric Observatory for Infrared Astronomy (SOFIA).
Tuesday, Mar 2, 2021
Tuesday COVID-19 Roundup: SCV Cases Total  26,212; L.A. County Remains in Most Restrictive Tier
The Los Angeles County Department of Public Health confirmed Tuesday 91 new deaths and 1,407 new cases of COVID-19, with 26,212 total cases in the Santa Clarita Valley.
Keep Up With Our Facebook

Latest Additions to SCVNews.com
1882 - George Campton's Newhall general store explodes [story]
general store
After receiving athletic protocol updates from the California Department of Public Health (CDPH), the Los Angeles Department of Public Health (LADPH) and California Interscholastic Federation (CIF), the William S. Hart Union High School District has put together a complete athletic program following all state and county guidelines.
Hart District Announces Outdoor Sports Practices, Competitions to Resume Immediately
The ability to transform data into information and insights that can elevate a business and influence decisions is at the core of the newest major being offered in California State University, Northridge’s David Nazarian College of Business and Economics.
CSUN Students Can Now Earn Degree in Business Analytics
Three teachers from the William S. Hart Union High School District have been named by NASA and the SETI Institute to fly on NASA’s Stratospheric Observatory for Infrared Astronomy (SOFIA).
NASA Selects Three Hart District Teachers for SOFIA Flight
Los Angeles County Parks is looking for highly-talented independent instructors to bring valuable expertise and learning to the community through the Contact Class Program.
L.A. County Parks Hiring Instructors for Summer 2021 Season
The Los Angeles County Department of Public Health confirmed Tuesday 91 new deaths and 1,407 new cases of COVID-19, with 26,212 total cases in the Santa Clarita Valley.
Tuesday COVID-19 Roundup: SCV Cases Total  26,212; L.A. County Remains in Most Restrictive Tier
The Santa Clarita Parks, Recreation, and Community Services Commission will hold its study session virtually Thursday, March 4, at 6:00 p.m.
March 4: Parks, Recreation & Community Services Commission Study Session
After its cancelation last year due to the emergence of COVID-19, the College of the Canyons Scholarly Presentation will return this spring in a new virtual format.
COC’s Scholarly Presentations Return Virtually March 11
The Santa Clarita Public Library is excited to present Sidewalk Stories at the Old Town Newhall Library!
Old Town Newhall Library Now Offering Sidewalk Storytime
Santa Clarita Planning commissioners are expected to make a decision Tuesday regarding the proposed expansion of Henry Mayo Newhall Hospital via multiple construction projects that include building a second inpatient tower.
Proposed Henry Mayo Expansion Project Back Before Planning Commission
Picture this…the sun has just set on another brisk spring day.
Santa Clarita City Manager’s Monthly Message – March 2021
1938 - Great Flood of 1938 causes massive destruction and death across the greater Los Angeles region [story]
flooding
Santa Clarita Valley educators were next in line to receive their COVID-19 vaccine shots at Henry Mayo Newhall Hospital Monday, more than two months after the hospital received its first batch of vaccines for hospital frontline workers.
Henry Mayo Now Inoculating Educators with COVID-19 Vaccine
Los Angeles County Public Health officials on Monday confirmed 32 new deaths and 987 new cases of COVID-19 countywide, as Henry Mayo Newhall Hospital in Valencia reported two new deaths since Friday.
Monday COVID-19 Roundup: 2 New Deaths at Henry Mayo; Vaccine Eligibility Expands
The Santa Clarita Valley Senior Center at Bella Vida has announced its March 2021 lineup of outdoor drive-in events.
Bella Vida Senior Center Sets March Outdoor Drive-in Events
In partnership with the Santa Clarita Valley Sheriff’s Station, the city of Santa Clarita will launch its “Guard That Auto” campaign this spring to combat an increase in grand theft auto over the past year.
Santa Clarita, Sheriff’s Station to Launch ‘Guard That Auto’ Anti-Theft Campaign
The Saugus High School academic decathlon team will advance to the state competition after placing in the top 10 in the county competition.
Saugus High Advances in State Academic Decathlon
Spring is upon us, and with it comes longer days, greener hillsides, and warmer temperatures that invite outdoor exploration.
Mayor’s March Message: Enjoy Spring in Santa Clarita
The city of Santa Clarita, in partnership with the Santa Clarita Sister Cities program, invites local students to submit artwork, poetry, essays/creative writing, photographs, or music for the 2021 Sister Cities International Young Artists and Authors Showcase.
Young Artists Invited to Submit Works in 2021 Sister Cities International Showcase
In a rush to bring children back to California schools after a year of closed campuses, Governor Gavin Newsom and lawmakers said Monday the state will offer $2 billion to school districts willing to reopen next month.
Newsom, Lawmakers Cut Deal to Reopen California Schools by April
The race to get a COVID-19 vaccine in Los Angeles County despite vaccine shortages is cutthroat and most people don’t even know they’re in the competition.
COVID-19 Vaccine Shortages Highlight Health Inequities in L.A. County
The California Department of Motor Vehicles has learned of a text message phishing scam related to REAL ID and reminds customers that it will never ask for personal information related to driver’s license number, Social Security number, or financial information through email, text, or over the phone.
DMV Warns Customers of REAL ID Phishing Scam
1990 - President George H.W. Bush and Sheriff Sherman Block dedicate new North County Correctional Facility in Castaic [story]
ribbon cutting
1890 - Jenkins ranch hands Dolores Cook and George Walton of Castaic slain by rival William Chormicle and W.A. Gardener [story]
Dolores Cook
%d bloggers like this: