An L.A. businesswoman received millions by claiming monthly payroll that was fictional, inflating her employee roster, and referring to a cannabis shop as a lawn-care company, federal prosecutors allege.
Now a federal grand jury has indicted Marisela Nuño, who is accused of attempting to defraud COVID-19 relief programs of about $18 million.
Nuño, 53, has been charged with three counts of wire fraud and one count of money laundering, according to the Department of Justice.
The former L.A. County commissioner and chief executive officer of International Developers and Engineering Group Inc., could not be reached for comment. Her attorney, Thomas O’Brien, declined to comment when reached by phone.
Prosecutors said Nuño sought to obtain the funds through the Paycheck Protection Program and the Economic Injury Disaster Loan program, both of which were created under the Coronavirus Aid, Relief and Economic Security Act.
Dubbed the CARES Act, the law helped provide emergency financial assistance to Americans suffering economic hardship as a result of the COVID-19 pandemic, including small businesses.
Federal prosecutors said in order for business owners to receive the funds, they were required to provide financial information including number of employees, average monthly payroll, gross revenues and eligibility for funding.
According to a criminal complaint filed last month, Nuño was able to secure $4.8 million by filing more than two dozen applications under the federal relief programs for several businesses she owns. Prosecutors listed the businesses in court documents.
Prosecutors alleged in the complaint that the applications included false and fraudulent statements such as the number of employees and average monthly payroll.
At least one of the programs uses the number of employees and monthly payroll to determine how much money an applicant receives.
In one example, prosecutors said that, on two separate occasions, Nuño received more than $400,000 for a business dubbed The Nuño Estate after claiming that she had about 20 employees and an average monthly payroll of more than $163,386.
“In fact, as defendant Nuño then knew, The Nuño Estate had neither 20 or more employees nor over $163,386 in average monthly payroll, “ the complaint read in part.
The business, prosecutors allege, was not operational when she applied for the loans.
Prosecutors claim Nuño used the money she received to purchase property, cover start-up costs and pay family members.
They also accused Nuño of collecting more than $300,000 for cannabis companies that were ineligible to receive funds by falsely mislabeling them or concealing the nature of the business.
Proseuctors said in the complaint that Nuño described one of the cannabis businesses, Hierba Buena, as “lawn care, commercial.”
“The EIDL applications submitted on behalf of Hierba Buena and Canna Caves each also falsely represented the entity’s gross revenues for the 12 months prior to January 31, 2020, as $3,659,400.00 and $964,000.00, respectively,” the complaint read.
If convicted, Nuño faces a maximum penalty of 20 years in prison on each count of wire fraud, and 10 years in prison on the count of money laundering.
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