SEDONA, Ariz. — A Sedona man has been indicted for allegedly participating in a scheme that tried to defraud $178 million from the federal government.
Eric Karnezis, 43, is facing fraud charges after he allegedly carried out a scheme to obtain loans through the Paycheck Protection Program put into place during the COVID-19 pandemic, according to the U.S. Attorney's Office of Oregon.
Karnezis and his associates allegedly submitted 1,300 PPP applications to the U.S. Small Business Administration for a total of $178 million in loans. About $105 million was paid out in loans to these alleged fraudulent applications.
The defendants allegedly used fictitious payroll information and tax documents to submit the PPP applications, prosecutors said.
The federal program was developed with the intention of providing financial assistance to businesses that experienced economic harm during the pandemic's shutdowns. Several individuals, including some from Arizona, have been convicted of defrauding the program.
Karnezis was arrested in Sedona on Sept. 5 and pleaded not guilty during his initial appearance in federal court. The other defendants in the case have been identified as Lynisha Wells, 47, Nikkia Bennett, 43, and Fredrico Williams, 48, all from California.
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