A San Bernardino County resident has been arrested on federal charges for allegedly securing over $800,000 in COVID-19 relief funds by hiding his prior conviction for mail fraud.
Justin Konikow, 38, of Ontario, faces a wire fraud charge and is scheduled to appear in U.S. District Court in Los Angeles. Authorities allege that in April 2020, Konikow applied for an Economic Injury Disaster Loan (EIDL) through the Small Business Administration (SBA), representing himself as the sole owner of a business called “Trendsetters.” The application stated that neither he nor the business had any criminal convictions.
However, court documents indicate that Konikow had been convicted in January 2020 for mail fraud after defrauding the United States and California’s Employment Development Department of more than $250,000 using false claims and synthetic identities. He was sentenced to 35 months in prison and began serving his sentence in February 2022.
The complaint further alleges that between 2021 and 2022, three EIDL loan modifications were submitted to increase the total funding. Each modification reaffirmed that all statements made previously were accurate and did not disclose Konikow’s criminal record.
The SBA approved each request and transferred about $805,000 into Konikow’s account. According to investigators, large portions of these funds were used to pay personal debts such as credit card bills and car payments, as well as transferring approximately $47,000 into a Robinhood trading account.
“The affidavit alleges that between 2021 and 2022, three EIDL modifications to increase the total proceeds were submitted, each identifying Konikow as Trendsetter’s sole owner. Each application contained a certification that all representations in the loan application (including in the original application) were true, correct, and complete, under penalty of perjury. None of the modification applications provided any information that Konikow was a convicted criminal.”
If found guilty, Konikow could face up to 20 years in federal prison.
The SBA Office of Inspector General is leading the investigation. Assistant United States Attorney Gregg Marmaro from the Major Frauds Section is prosecuting this case.
Anyone with information regarding suspected COVID-19 related fraud can contact the Department of Justice’s National Center for Disaster Fraud at (866) 720-5721 or submit a report online at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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