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Hopkinton couple faces federal expenses for utilizing their Framingham roofing firm to defraud staff’ comp insurers of $627K and the SBA on a $2 million COVID-19 aid mortgage
A federal grand jury has indicted a Hopkinton couple, Ronaldo Solano, 51, and Adriana Solano, 40, charging them with defrauding their staff’ compensation insurance coverage carriers, the Small Enterprise Administration (SBA), and their mortgage lender. The Solanos function a roofing and development firm primarily based in Framingham beneath the names H&R Roofing & Development Inc. and H&R Roofing & Siding Corp.
Based on the indictment, the couple’s alleged fraudulent actions occurred between 2012 and 2022. The indictment accuses the Solanos of avoiding greater than $627,000 in staff’ compensation insurance coverage premiums by underreporting their payroll and paying workers by a shell firm. Moreover, they allegedly obtained $2 million in pandemic aid funds by the SBA’s Financial Harm Catastrophe Mortgage (EIDL) Program and fraudulently used over $825,000 of those funds as a down cost on a house in Hopkinton with out disclosing the supply of the funds to their mortgage lender.
Staff’ Compensation Insurance coverage Fraud Scheme
Underreporting payroll to insurance coverage carriers
Based on the indictment, from 2012 to 2020, Ronaldo and Adriana Solano engaged in a scheme to defraud their staff’ compensation insurance coverage carriers, solely recognized within the indictment as “Insurance coverage Firm 1” and “Insurance coverage Firm 2,” by underreporting the payroll of their firms, H&R Roofing & Development Inc. and H&R Roofing & Siding Corp. The Solanos allegedly falsely reported to the insurance coverage firms at instances that they’d no workers or contract labor or that their workers solely carried out clerical or gross sales work when, in reality, they’d workers engaged in roofing work. By underreporting their payroll, the Solanos may keep away from paying the total staff’ compensation insurance coverage premiums owed to the insurance coverage firms.
Utilizing a shell firm to pay workers and evade premiums
Along with underreporting their payroll, the Solanos allegedly used a shell firm to pay their workers. By paying workers by a separate entity, the Solanos additional insulated themselves from disclosing the true dimension of their workforce and the character of their workers’ work from their staff’ compensation insurance coverage carriers.
Whole quantity of premiums evaded: roughly $627,000
The indictment alleges that by their scheme of underreporting payroll and paying workers by a shell firm, Ronaldo and Adriana Solano averted paying roughly $627,000 in staff’ compensation insurance coverage premiums between 2012 and 2020. This sum represents the distinction between the premiums the Solanos paid and the premiums they might have owed had they precisely reported their payroll and the character of their workers’ work to their insurance coverage carriers.
Financial Harm Catastrophe Mortgage (EIDL) Fraud Scheme
A $2 million SBA mortgage for his or her roofing enterprise
Based on the indictment, in September 2021, Ronaldo Solano submitted an utility to the Small Enterprise Administration (SBA) for an Financial Harm Catastrophe Mortgage (EIDL) on behalf of H&R Roofing & Siding Corp. Till 2022, the EIDL program offered monetary help to eligible small companies experiencing substantial monetary disruption because of the COVID-19 pandemic. Within the utility, Solano requested $2 million in aid funds for working capital and different eligible enterprise bills. Each Ronaldo and Adriana Solano allegedly made a number of calls to the SBA to inquire concerning the standing of their EIDL utility.
Transferring $1 million of EIDL funds to a private account
In February 2022, the SBA wired $1,999,900 in EIDL funds to H&R Roofing & Siding Corp.’s enterprise account. The indictment alleges that Ronaldo and Adriana Solano opened a brand new enterprise account for H&R Roofing & Siding the next day and transferred $2 million from the unique enterprise account to the brand new one. Subsequently, the Solanos transferred $1 million from the brand new enterprise account to their private checking account, which had a stability of solely $7,040.91 earlier than the switch.
Utilizing over $825,000 of EIDL funds for a down cost on a Hopkinton house
After transferring the EIDL funds to their account, Ronaldo and Adriana Solano allegedly used greater than $825,000 as a down cost to buy a house in Hopkinton, Massachusetts, for $1.7 million. The indictment states that on April 5, 2022, the Solanos wired $879,764.43 from their account to an IOLTA account managed by the closing lawyer for the acquisition of the Hopkinton property.
Mortgage Fraud
Borrowing $770,500 from a mortgage lender for the Hopkinton house buy
Along with utilizing $825,000 of the EIDL funds for the down cost on the Hopkinton house, Ronaldo and Adriana Solano borrowed $770,500 from a mortgage lender, Assured Price, Inc., to finance the rest of the acquisition worth. The indictment alleges that on April 6, 2022, Ronaldo and Adriana Solano electronically signed Uniform Residential Mortgage Purposes (URLAs) to acquire the Assured Price, Inc. mortgage mortgage.
Failing to reveal the usage of EIDL funds for the down cost to the lender
Based on the indictment, of their respective URLAs, Ronaldo and Adriana Solano responded “NO” to the query, “Are you borrowing any cash for this actual property transaction (e.g., cash in your closing prices or down cost) or acquiring any cash from one other get together, akin to the vendor or realtor, that you haven’t disclosed on this mortgage utility?” The Solanos allegedly didn’t speak in confidence to Assured Price, Inc. that they have been utilizing funds from the EIDL to pay for the down cost on the Hopkinton house. The indictment additional states that Assured Price, Inc. issued the $770,500 mortgage mortgage to the Solanos primarily based on their materially false and fraudulent statements within the URLAs.
Fees within the indictment and the potential penalties
Conspiracy to commit mail and wire fraud
Ronaldo and Adriana Solano have been charged with one depend every of conspiracy to commit mail and wire fraud in reference to their alleged staff’ compensation insurance coverage fraud scheme. This cost carries a possible sentence of as much as 20 years in jail, three years of supervised launch, and a high quality of $250,000 or twice the gross acquire or loss, whichever is bigger.
Conspiracy to commit wire and financial institution fraud
The Solanos additionally every face one depend of conspiracy to commit wire and financial institution fraud associated to the alleged EIDL scheme and mortgage fraud. This cost carries a possible sentence of as much as 30 years in jail, 5 years of supervised launch, and a high quality of $1 million or twice the gross acquire or loss, whichever is bigger.
Mail fraud and wire fraud expenses for Ronaldo Solano
Along with the conspiracy expenses, Ronaldo Solano has been charged individually with mail fraud and one wire fraud. Every cost carries a possible sentence of as much as 20 years in jail, three years of supervised launch, and a high quality of $250,000 or twice the gross acquire or loss, whichever is bigger.
Potential sentences for every cost are topic to federal sentence tips
Whereas the federal statutes creating the crimes alleged within the indictment state the utmost allowable sentences for every cost, a federal district courtroom decide will determine the sentences imposed, in step with the federal sentencing tips, if the Solanos are convicted or plead responsible.
Passport Give up and Discover to the Brazilian Consulate
Solanos required to give up passports
As a part of their circumstances of launch on private recognizance, Ronaldo and Adriana Solano had their journey restricted to Massachusetts and have been ordered to give up their passports to the USA Probation and Pretrial Providers. This customary measure ensures that defendants don’t flee the nation whereas awaiting trial or different courtroom proceedings associated to the costs towards them. Nevertheless, as Adriana Solano is a twin nationwide of the USA and Brazil, extra steps have been required to make sure compliance with the Court docket’s journey restriction.
Discover to the Brazilian Consulate in Boston
On March 13, 2024, the USA District Court docket for the District of Massachusetts ordered Adriana Solano’s counsel to tell the Brazilian Consulate in Boston of the pending expenses towards her and the Court docket’s order prohibiting her from making use of for or acquiring journey paperwork whereas the case is pending or till additional order of the Court docket. On March 14, 2024, Ms. Solano’s counsel filed a Discover of Compliance with the Court docket, confirming that he had notified the Brazilian Consulate as required by the Court docket’s order.
The Prosecution staff
Appearing United States Legal professional Joshua S. Levy; Jodi Cohen, Particular Agent in Cost of the Federal Bureau of Investigation, Boston Division; Christopher Algieri, Particular Agent in Cost of the Northeast Area Workplace of the U.S. Division of Veterans Affairs Workplace of Inspector Basic; and Harry Chavis, Jr., Particular Agent in Cost of the Inner Income Service Felony Investigation, Boston Area Workplace made the announcement of the arrest and arraignment of the Solanos. Based on the announcement, useful help was offered by the Insurance coverage Fraud Bureau of Massachusetts. Assistant U.S. Legal professional Kristen A. Kearney of the Securities, Monetary & Cyber Fraud Unit is prosecuting the case.
Hotline for reporting COVID-19 profit program frauds
The prosecution staff’s announcement emphasised that anybody with details about allegations of fraud or tried fraud involving COVID-19 can report it by calling the Division of Justice’s Nationwide Middle for Catastrophe Fraud (NCDF) Hotline at 866-720-5721 or through the NCDF Net Grievance Kind at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The Catastrophe Fraud web site permits you to submit complaints of fraud, waste, abuse, or mismanagement associated to any man-made or pure catastrophe but additionally handles ideas regarding prison exercise involving the coronavirus (COVID-19) profit packages for people and companies.
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