California Couple Sentenced for Defrauding Paycheck Protection Program

News Release from U.S. Attorney's Office, District of Hawaii, Friday, January 10, 2025

HONOLULU – On January 9, 2025, Senior United States District Judge J. Michael Seabright sentenced Christopher A. Mazzei, 46, and Erin V. Mazzei, 43, both of Arroyo Grande, California, to 36 months and 27 months of imprisonment, respectively, for conspiracy to commit wire fraud and conspiracy to commit money laundering in connection with a scheme to defraud the government of forgivable Paycheck Protection Program (PPP) loan funds intended for Coronavirus-related relief. The Mazzeis pleaded guilty to two counts of an Indictment on August 28, 2024.

According to court documents and the statements of counsel at sentencing, Christopher and Erin Mazzei, who are husband and wife, submitted applications for PPP funds to Bank of Hawaii and two other banks on behalf of three purported businesses, each time utilizing interstate wires. For each application, the Mazzeis created false Internal Revenue Service (IRS) tax returns and payroll records, which they presented as authentic and submitted to the banks to support their claims for PPP loan funds. The Mazzeis admitted that as a result of the false and fraudulent applications, they received $1,365,000 in PPP loan funds, which they then used for personal purposes, such as to purchase multiple sport utility vehicles and a home in Kapolei, Hawaii, among other things. In addition, the couple spent approximately $164,796 to film a promotional trailer for a television project entitled “Ohana,” that they hoped to produce in the State of Hawaii, and that they hoped would attract the attention of film producer and actor Dwayne Johnson.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, which was designed to provide emergency financial assistance to the millions of Americans who were suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.  

The PPP allowed qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds had to be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allowed the interest and principal on the PPP loan to be entirely forgiven if the business spent the loan proceeds on these expense items within a designated period of time after receiving the proceeds and used at least a certain percentage of the PPP loan proceeds on payroll expenses.

Referring to the PPP as “crisis-based legislation,” Judge Seabright called the fraud conduct here “particularly blatant and egregious.” In pronouncing his sentence to both defendants, Judge Seabright remarked, “greed drove both of you.” 

“The Mazzeis perpetrated a gross fraud to obtain critical resources intended for members of our community experiencing devastating hardships as a result of the pandemic,” said United States Attorney Clare E. Connors. “The sentences appropriately condemn their conduct, and our office remains committed to bringing these prosecutions to ensure accountability for such bad acts and to protect the public fisc.”

“This scheme diverted emergency relief that could have paid 25 Americans an average salary,” said Adam Jobes, Special Agent in Charge of IRS Criminal Investigation’s Seattle Field Office. “While small businesses shut down all over the country, the Mazzeis lived in excess on the taxpayer’s dime.” 

“Christopher and Erin Mazzei falsified loan applications to fraudulently obtain PPP loan proceeds earmarked to help struggling businesses during the COVID-19 pandemic. The Mazzeis actions not only defrauded the PPP Loan Program, but also disadvantaged business owners who were entitled to the benefits,” said Special Agent in Charge Ryan L. Korner from the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG). “The FDIC OIG is committed to working alongside our law enforcement partners to protect the Nation’s financial system and hold accountable those individuals, like the Mazzeis, who steal benefits designated to help those in need.” 

“Christopher and Erin Mazzei defrauded the federal government of pandemic relief funds for their own personal gain and have now been brought to justice for their actions,” said Jon Ellwanger, Special Agent in Charge, Western Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau. “We are proud to have worked with our federal law enforcement partners and the U.S. Attorney’s Office to hold Mr. and Mrs. Mazzei accountable.” 

The investigation was conducted jointly by IRS Criminal Investigation, the FDIC Office of Inspector General, and the Office of Inspector General for the Board of Governors of the Federal Reserve System, with assistance from the Small Business Administration Office of Inspector General and the U.S. Treasury Inspector General for Tax Administration. Assistant U.S. Attorney Gregg Paris Yates prosecuted the case. 

On May 17, 2021, 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. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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