Down on His Luck Businessman Uses $7 Million of Fraudulently Obtained PPP Funds to Buy Maserati and Mansion
We can all agree that the COVID-19 pandemic has taken a good portion of the fun out of the Florida sunshine, but there is a solution to that. Are you bummed out that you can no longer watch movies at Florida’s dazzling cineplexes? Just built your own home movie theater, pirate-themed décor and all! Do you miss your drinking buddies? Why not create your own pub so big that sitting six feet apart from your closest friend comes naturally? Disappointed that it is no longer safe to play tennis at the country club with your friend? You can always make your own tennis court at home. Tired of the slow pace of quarantine life? A Maserati can satisfy your need for speed. Who cares if you only have 89 dollars to your name? That’s what PPP loans are for! If this sounds like a far-fetched “Florida man” tale to you, our Miami white collar crimes defense lawyer will explain how an entertainment industry consultant who had fallen on hard times allegedly made false statements in order to obtain $7 million in pandemic relief loans and how he got caught.
How It Began: Debt-Ridden Businessman Meets Pandemic
Like many Floridians, Don Cisternino divided his time between New York and Florida before the COVID-19 pandemic began. He spent most of the year living in a luxury apartment near Bradenton with his girlfriend Lori Quasky and her two children. He often traveled to New York, where he owned a consultancy firm called MagnifiCo, which, according to Cisternino’s LinkedIn page, provides “professional and personal services” to members of the entertainment media industries, and Quasky worked as a marketing executive for a real estate property management company, but despite their jobs, they struggled to afford their luxurious lifestyle. They had not been able to pay rent on their apartment since August 2019, and their landlord was threatening them with eviction. According to the Daily Mail, Cisternino had borrowed more than a million dollars from a family member. A bank had sued him, and he still owed his lawyers more than $40,000 for representing him in that lawsuit.
Things only got worse when the COVID-19 pandemic hit Florida. Quasky was laid off from her job in March, at the beginning of the pandemic. Like many business owners hit hard by the pandemic, Cisternino applied for loan money through the Paycheck Protection Program (PPP), a provision of the CARES Act meant to provide workers and businesses with a financial cushion during the pandemic. When he received the PPP funds, he transferred a substantial amount of the money to his personal account, which had a balance of only $89.44.
Things Fall Apart: Fuzzy, and Suspiciously Neat, Math
The fact that Cisternino struggled financially before and during the COVID-19 pandemic and that he applied for and received a PPP loan does not make him the slightest bit unusual, and neither does the fact that he spent some of the money on personal expenses. To be fair, the first thing he did when he received the money was to repay the debts he owed to his relative and his lawyer. He also spent about 10 percent of the $7.2 million he received on business projects, buying small film production companies and website domains.
The personal expenses were beyond extravagant. Cisternino purchased a Maserati, a Lincoln Navigator, and a Mercedes-Benz for himself and a Nissan for Quasky. The biggest expense, though, was the 7-bedroom mansion in Manatee County, which Cisternino bought with $3.5 million of PPP money. The mansion had a tennis court, horse stables, a movie theater, and a British style pub, plus a drop-dead gorgeous swimming pool and a two-bedroom guest house.
Authorities became even more suspicious when they reviewed the documentation Cisternino had sent in support of his loan application. He claimed that his company had 441 employees, each of whom earned $85,000 per year, which is plausible enough. What is less plausible is his claim that the company withheld $3,356 in taxes for every employee. In reality, employees who earn the same amount of money get different amounts withheld in taxes; it depends on the employee’s marital status and how many family members the employee claims as dependents. Upon closer inspection, investigators realized that some of the social security numbers for the purported employees were duplicates, and three SSNs belonged to deceased people. It turned out that the company had very few employees, if any.
The Charges: Wire Fraud, Identity Theft, and Illegal Monetary Transaction
Cisternino is facing criminal charges for three counts of illegal monetary transaction, three counts of identity theft, and two counts of wire fraud. If convicted of all his charges, he could spend decades in prison.
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All defendants in criminal cases have the presumption of innocence until proven guilty beyond a reasonable doubt. Contact the Miami white collar crime lawyers at Ratzan & Faccidomo for help with your case.