Shelton Man Sentenced In COVID-19 Relief Funds Fraud Case: Feds

SHELTON, CT — A Shelton man accused of fraudulently obtaining COVID-19 relief funds was sentenced Wednesday to 21 months in prison and three years of supervised release, according to an announcement from David Sullivan, U.S. Attorney for the District of Connecticut.

According to court documents and statements made in court, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, which provided emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic.

One source of relief provided by the CARES Act was the authorization of forgivable loans to small businesses for job retention and certain other expenses through the Paycheck Protection Program, according to Sullivan.

In April 2020, Congress approved more than $300 billion in additional PPP funding, which allowed qualifying small businesses and other organizations to receive unsecured loans at an interest rate of 1 percent, according to Sullivan.

PPP loan proceeds were to be used by businesses on payroll costs, interest on mortgages, rent and utilities. The PPP allowed the interest and principal to be forgiven if businesses spent the proceeds on these expenses within a certain period of time of receipt and used at least a certain percentage of the amount to be forgiven for payroll, according to Sullivan.

The PPP was overseen by the Small Business Administration, which has authority over all PPP loans. Individual PPP loans, however, were issued by private approved lenders, which received and processed PPP applications and supporting documentation, then made loans using the lenders' own funds, which were guaranteed by the SBA, Sullivan said.

According to Sullivan, Vincenzo Minutolo, 39, of Shelton, claimed an ownership interest or representative relationship with City Sounds Productions LLC, or "City Sounds."

Between March and September 2021, Minutolo defrauded the PPP loan program of more than $145,000 by providing false information on loan applications for City Sounds, including overstating the yearly gross income for City Sounds, misrepresenting that similar PPP loans had not been or would not be sought when he had, in fact, sought and obtained, and intended to seek and obtain, such loans and providing fraudulent IRS tax filings and tax payment vouchers for City Sounds that had, in fact, never been filed with the IRS, according to Sullivan.

Similarly, on the forgiveness applications he submitted, Minutolo materially misrepresented having complied with all the requirements of the PPP rules, Sullivan said.

The CARES Act also created a new temporary federal unemployment insurance program for pandemic unemployment assistance, which provided unemployment insurance benefits for employed individuals who are not eligible for other types of UI due to their employment status, Sullivan said.

The CARES Act also created a new temporary federal program called Federal Pandemic Unemployment Compensation that provided additional weekly benefits to those eligible for Pandemic Unemployment Assistance or regular UI, according to Sullivan.

The Connecticut Department of Labor administers UI benefits for residents of Connecticut, Sullivan noted.

Between March 2020 and April 2021, Minutolo defrauded the state DOL of more than $140,000 by providing the department with fraudulent Pandemic Unemployment Assistance applications seeking unemployment insurance payments in others' names, including individuals who had died and individuals who did not know that their name and sometimes other personal information was being used, according to Sullivan.

One fraudulent application was for Minutolo's grandfather, who died in 2014, and included a telephone number associated with Minutolo, Sullivan said.

According to Sullivan, Minutolo continued to make online weekly certifications to the state DOL attesting that the information contained in his grandfather's application and other applications were true in order to receive continued unemployment insurance benefits.

A judge ordered Minutolo to pay $244,612 in restitution, Sullivan said.

Minutolo pleaded guilty to two counts of wire fraud on Feb. 28. He was released on a $50,000 bond and is required to report to prison in January, according to Sullivan.