IE Man Accused Of Scheming For Government Funding

ONTARIO, CA — An Inland Empire man is facing 20 years in federal prison if he is convicted on a wire fraud charge tied to allegations that he illegally obtained more than $800,000 in COVID-19 relief funds by concealing a mail fraud conviction on his record.

In a Department of Justice news release announcing the Aug. 6 arrest of 38-year-old Justin D. Konikow of Ontario, the government alleged that, in April 2020, Konikow applied for an Economic Injury Disaster Loan. The federal loan program provided low-interest funding to small businesses affected by the COVID-19 pandemic.

Konikow's April 2020 loan application was submitted on behalf of a company he called "Trendsetters." Konikow was listed as Trendsetters' sole owner.

The application contained representations that neither Konikow nor the business had ever been criminally charged or convicted of a crime.

According to federal prosecutors, that wasn't true.

Konikow was convicted in January 2020 of mail fraud in Los Angeles federal court. He allegedly schemed to defraud the United States, the state of California and its Employment Development Department out of more than $250,000 by filing false unemployment and disability insurance claims using fake identities and fake companies.

Konikow was sentenced in January 2021 to 35 months’ imprisonment and began serving his sentence in February 2022.

After his conviction but before his sentencing and eventual imprisonment, Konikow was scamming the EIDL program. According to prosecutors, between 2021 and 2022, he made three EIDL modifications to increase his total proceeds, each identifying himself 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, according to prosecutors.

The Small Business Administration approved the EIDL and each modification application, and wired the loan proceeds totaling approximately $805,000 into Konikow’s bank account. Konikow then wired substantial amounts of the COVID funds out of his bank account to pay off his credit card debt, car payments, and a transfer of approximately $47,000 to his Robinhood stock trading account, according to prosecutors.

Konikow is now charged with one count of wire fraud. A search on Tuesday using the Bureau of Prisons inmate locator system showed Konikow was no longer in custody. He was expected to make his initial appearance last week in U.S. District Court in downtown Los Angeles. It's not clear when his trial might begin.