A Santa Clarita man, along with his business partner from Northridge, has been charged on suspicion of defrauding the government of nearly $2 million in Paycheck Protection Program loans.
Raymond Magana, 39, of Santa Clarita, and Steven R. Goldstein, 36, are both charged 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.
“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,” said a U.S. Attorney’s news release about the case.
The PPP loan program was rolled out at the beginning of the COVID-19 pandemic and was designed to incentivize businesses to keep their workers on their payroll.
Magana created two shell companies named The Building Circle LLC and Forward Builders LLC, which he used to claim, according to the affidavit, through the use of fake tax documents and false employee information, that he had a combined payroll of more than $6.2 million.
The complaint alleges that while Magana was filing his own claims, Goldstein had filed four of his own 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.
Magana was listed as the CEO of Antelope Valley Real Estate Development, while Goldstein is listed as its manager, according to California state business records. The two businesses would receive $655,000 in PPP loans.
Law enforcement officials say the defendants’ alleged scheme began to unravel when investigators learned the IRS could show The Building Circle had never paid a single employee, nor did they have proof that the employees actually existed.
Additionally, the address listed as The Building Circle’s company headquarters in Pico Rivera was not in a business park, but rather was a 980-square-foot single-family home that “appeared to be a residence.”
Goldstein was expected to appear in court this week, while Magana is scheduled to appear next month on a date that has not yet been chosen.
If convicted of these charges, Magana and Goldstein each would face a statutory maximum sentence of 127 years in federal prison.
