The Middleman


Who is a middleman? A middleman plays the role of an intermediary in a distribution or transaction chain who facilitates interaction between the involved parties. A middleman will earn a fee or commission in return for services rendered in matching buyers and sellers. Rafael Martinez, CEO of MBE Capital Partners was the middleman COVID-19 Paycheck Protection Program loans. But when it comes to Martinez, a more apt description of middleman might be the definition by Benjamin Disraeli: “It is well known what a middleman is: he is a man who bamboozles one party and plunders the other.” Which is exactly what Martinez did.

Banks acted as gatekeepers for the PPP program, shepherding small businesses through the application process. And Martinez wanted in. In order to qualify as a non-bank lender for PPP loans, Martinez used false representations and documents with his fraudulent application to the U.S. Small Business Administration (SBA) for his company, MBE Capital Partners.

As a result of the above fraudulent misrepresentations of his company, Martinez became an approved PPP lender and issued approximately $823 million in PPP loans to approximately 36,600 business. Do you think he carefully vetted those loans? Fraudsters don’t stop fraudsters if they can benefit from it themselves. Heck, Martinez even fraudulently obtained a PPP loan of approximately $283,764 for his own company. It didn’t matter to him who got the loans. These loans earned Martinez a total of approximately $71.3 million in loan processing fees.

Martinez spent the proceeds from his criminal conduct on, among other things, the purchase of a villa in the Dominican Republic for over $10 million, a $3.5 million mansion located in Franklin Lakes, New Jersey, a chartered jet service, and several luxury vehicles, including a 2018 Porsche 911 Turbo, a 2017 Ferrari 488 Spider, a 2017 Bentley Continental GT, a BMW 750, and a 1962 Mercedes Benz 190. All will be going to the government for restitution. Martinez pled guilty on March 23, 2023 to wire fraud.

Kudos to the IRS in their involvement with this case.

Today’s Fraud Of The Day is based on article “CEO Of PPP Lender MBE Capital Pleads Guilty To Fraudulent Loan And Lender Applications” published by Shore News on March 23, 2023

Rafael Martinez, CEO of MBE Capital Partners, pled guilty today to conspiring to commit wire fraud in connection with loan and lender applications submitted through the Paycheck Protection Program (PPP) administered by the U.S. Small Business Administration (SBA).

Martinez used false documents to secure hundreds of millions of dollars in capital for PPP loans and ultimately collected over $71 million in lender fees.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.