Mark Erjavec, a 49-year-old resident of Edina, Minnesota, has been indicted on five counts of wire fraud for allegedly obtaining more than $975,000 in Covid-19 relief funds through fraudulent means. The indictment was announced by Acting U.S. Attorney Joseph H. Thompson, and Erjavec made his initial appearance in federal court.
“Erjavec stole nearly $1 million in government dollars meant to keep small businesses alive during the pandemic,” said Acting U.S. Attorney Joseph H. Thompson. “When Minnesotans were struggling to keep their doors open and pay their workers, Erjavec lined his own pockets. Fraud that exploits a crisis is especially shameful.”
According to investigators, after the onset of the Covid-19 pandemic, Erjavec executed a scheme to defraud federal programs established to provide financial assistance to small businesses affected by the economic downturn. He reportedly revived inactive business entities he had previously owned and used them as vehicles for submitting false applications for Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) funds from the Small Business Administration (SBA).
These dormant businesses included Tricolor Heron, LLC; Mesaba Finance – Law, LLC; Mesaba Finance – Summit, LLC; among others that were administratively dissolved between 2008 and 2013 by the Minnesota Secretary of State. Between April and August 2020, Erjavec reactivated these companies and filed fraudulent claims by overstating revenues, inventing employees who did not exist, and attaching fabricated IRS tax forms to make his applications appear legitimate. In many cases, he opened new bank accounts for these shell entities shortly after registering them.
The indictment alleges that Erjavec funneled the relief funds into accounts under his exclusive control and used the money for personal expenses.
“As alleged in the indictment, Mark Erjavec knowingly submitted false and fraudulent documents to the Small Business Administration in order to take money intended for legitimate small businesses suffering during the Covid-era economic downturn,” said Minneapolis FBI Special Agent in Charge Alvin M. Winston Sr. “Erjavec re-registered dormant business entities in order to facilitate the theft of more than $975,000 in taxpayer dollars. Our efforts to stop this egregious fraud are moving forward full speed ahead; we will work with our partners at the Small Business Administration and the U.S. Attorney’s Office to hold accountable those who illegally enrich themselves by defrauding the government.”
The investigation was conducted jointly by the Office of Inspector General at the U.S. Department of Commerce and the FBI as part of the Pandemic Response Accountability Committee (PRAC) Task Force. This task force was created with a mandate to ensure transparency and coordinated oversight regarding federal COVID-19 relief measures.
Assistant U.S. Attorney Bradley M. Endicott is leading prosecution efforts.
It is noted that an indictment constitutes only an allegation at this stage; all defendants are presumed innocent until proven guilty beyond a reasonable doubt in court.
