Date: May 3, 2022 Contact: newsroom@ci.irs.gov United States Attorney Roger B. Handberg announces that Don V. Cisternino (Chuluota) has been successfully extradited from Croatia to face charges of wire fraud, aggravated identity theft, and illegal monetary transactions. A federal grand jury in Orlando previously returned an indictment against Cisternino for these charges in February 2021. If convicted, Cisternino faces a maximum penalty of 20 years in federal prison for each wire fraud count, up to 10 years' imprisonment for each illegal monetary transaction count, and a mandatory consecutive term of two years for the aggravated identity theft counts. Cisternino arrived in Orlando and had his initial appearance on the charges on April 29, 2022, following which he was ordered detained pending trial. According to the indictment, in May 2020, Cisternino fraudulently secured more than $7.2 million in emergency funds through a Paycheck Protection Program ("PPP") loan. The Coronavirus Aid, Relief, and Economic Security ("CARES") Act is a federal law enacted March 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in potentially 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 allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if the business spends the proceeds on these expenses within a set time-period and uses at least a certain percentage of the loan towards qualifying business expenses. Cisternino's PPP loan application falsely claimed that Cisternino's New York business, MagnifiCo, had 441 employees and monthly payroll expenses in 2019 of more than $2.8 million. In truth, MagnifiCo, had few, if any, employees other than Cisternino and his girlfriend, and MagnifiCo did not report any wages to the IRS for 2019. In support of his PPP loan application, Cisternino submitted false W-2s for MagnifiCo's purported employees, many of which listed the names and social security numbers of actual persons who were not MagnifiCo employees and who had not authorized Cisternino to use their identities. Once he obtained the emergency loan of $7.2 million, Cisternino did not use these funds for qualifying expenses. Instead, he spent the funds for unauthorized purposes and for his own personal enrichment, including the purchase of Lincoln Navigator, Maserati, and Mercedes-Benz vehicles, and an approximately 12,579 sq. ft. residence in Seminole County, Florida, pictured below. "Financial fraud targeting COVID-relief funds is a serious crime," stated U.S. Attorney Roger B. Handberg. "Our successful extradition of this defendant from Croatia back to Orlando shows that we and our law enforcement partners will pursue every lawful avenue to locate and prosecute those engaged in such fraud." Department of Justice Director of COVID-19 Fraud Enforcement Kevin Chambers stated, "This matter demonstrates that the Department will aggressively go after anyone who stole pandemic relief funds, whether they are in the United States or hiding overseas. I applaud the tireless work of the Middle District of Florida in achieving this important step and thank our international partners for their assistance." An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty. This case is being investigated by the Internal Revenue Service – Criminal Investigation, Tampa Field Office. The Justice Department's Office of International Affairs provided valuable assistance in securing Cisternino's arrest and extradition. It is being prosecuted by Assistant United States Attorney Chauncey A. Bratt.
