A San Bernardino County resident was arrested on federal charges alleging he fraudulently obtained over $800,000 in COVID-19 relief funds by hiding a prior felony conviction. Justin Konikow, 38, of Ontario, faces a wire fraud charge and is scheduled to appear in U.S. District Court in Los Angeles.
According to an affidavit filed with the complaint, Konikow applied for an Economic Injury Disaster Loan (EIDL) in April 2020 on behalf of a business named “Trendsetters,” listing himself as the sole owner. The application stated that neither he nor the business had ever been criminally charged or convicted. However, Konikow had been convicted of mail fraud in January 2020 for defrauding the United States, California, and its Employment Development Department through false unemployment and disability insurance claims. He was sentenced to 35 months in prison and began serving his sentence in February 2022.
The affidavit further alleges that between 2021 and 2022, three EIDL modification applications were submitted to increase the loan amount. Each application certified under penalty of perjury that all information provided was true and complete but did not disclose Konikow’s criminal history.
The Small Business Administration approved each application and wired approximately $805,000 into Konikow’s bank account. The funds were then used to pay off credit card debt, car payments, and included a transfer of about $47,000 to his Robinhood stock trading account.
“A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.”
If found guilty, Konikow could face up to 20 years in federal prison.
The case is being investigated by the SBA Office of Inspector General. Assistant United States Attorney Gregg Marmaro from the Major Frauds Section is prosecuting.
“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 Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.”
