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April 12, 2022Phoenix, AZ, United StatesDocument and Benefit Fraud, Covid-19

Gilbert man sentenced to prison for PPP fraud following ICE HSI investigation

PHOENIX, Ariz. – A local area man was sentenced Thursday to 48 months in prison and ordered to pay over $2.2 million in restitution for fraudulently obtaining millions of dollars in Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans. This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) assisted by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.

James Theodore Polzin, 48, of Gilbert, Arizona, pleaded guilty in October 2021.

“This defendant defrauded a program intended to assist hardworking Americans who have been unfairly impacted as a result of this unprecedented and challenging health crisis,” said Scott Brown, special agent in charge for HSI Phoenix. “HSI remains committed to working with our law enforcement partners to bring every asset to bear against anyone who knowingly and willingly seeks to take advantage of the pandemic to deceive others for their own profit.”

The Coronavirus Aid, Relief, and Economic Security Act (“CARES”) is a federal law designed to provide emergency financial assistance to the millions of Americans who are suffering financially due to the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of forgivable loans to small businesses for job retention and certain other expenses, including PPP loans.

Polzin submitted materially false loan applications that claimed non-existent employees and revenues for business entities he owned and operated. From April 2020 to August 2020, Polzin applied for loans totaling over $3.5 million. Polzin then used a portion of the proceeds for his own personal benefit, which included purchasing a Porsche, a home, and stashing money offshore.

HSI launched Operation Stolen Promise in April 2020 to protect the Homeland from the increasing and evolving threat posed by COVID-19-related fraud and criminal activity. As of May 2021, the agency has seized more than $49 million in illicit proceeds; made 281 arrests; executed over 200 search warrants and analyzed more than 80,000 COVID-19 related domain names. Working with U.S. Customs and Border Protection, more than 2,100 shipments of mislabeled, fraudulent, unauthorized or prohibited COVID-19 test kits and other related items have been seized. For its role in the operation, HSI’s Cyber Crimes Center applies technological, operational, and criminal investigative expertise, products and services to target the criminals and organizations attempting to commit cybercrimes and exploitation related to COVID-19.

Federal law enforcement agencies are united in our efforts to fight against COVID-19 fraud. HSI has identified tips to recognize and report COVID-19 fraud. In May 2020, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.

This case was prosecuted by the U.S. Attorney’s Office, District of Arizona.

HSI is the principal investigative arm of ICE responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel and finance move. HSI’s workforce of over 10,400 employees consists of more than 7,100 special agents assigned to 220 cities throughout the United States, and 80 overseas locations in 53 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.