CALIFORNIA – The U.S. Department of Justice (DOJ) announced August 6, that a California man was arrested for allegedly hiding a prior mail fraud conviction to obtain $800,000 in COVID relief funds.

Justin Konikow, 38, of Ontario, faces wire fraud charges and was set to appear in federal court in Los Angeles on August 6.

According to the complaint, Konikow applied for a COVID-19 Economic Injury Disaster Loan (EIDL) in April 2020.

The EIDL program provided low-interest funding to small businesses affected by the COVID-19 pandemic. 

The application listed Konikow as the sole owner of a business named “Trendsetters.”

In April 2020, Konikow falsely claimed that neither he nor his business had any criminal charges or convictions.

However, Konikow was convicted in January 2020 of mail fraud for defrauding government agencies out of over $250,000 using fake identities and companies.

He was sentenced to 35 months in prison in January 2021 and began serving in February 2022.

Used funds to pay off debt, car payments, and fund Robinhood account

Between 2021 and 2022, three EIDL loan increase requests were submitted, all listing Konikow as Trendsetters’ sole owner. Each application was certified under penalty of perjury as containing true and complete information.

None of the modification applications disclosed Konikow’s criminal conviction.

The Small Business Administration (SBA) approved the loan modifications, sending about $805,000 to Konikow’s bank account.

Konikow quickly transferred much of the COVID funds to pay credit card debt, car payments, and $47,000 to his Robinhood stock account.

Faces up to 20 years in prison

A criminal complaint alleges charges. Defendants are presumed innocent until proven guilty.

If convicted, Konikow faces up to 20 years in federal prison.

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