NY Real Estate Company Owner Sentenced in $1.6M Fraud

A New York businessman has been sentenced to prison for orchestrating a scheme to defraud the U.S. Small Business Administration of more than $1.6 million in COVID-19 relief funds.

Elizier Scher of Spring Valley was sentenced to a year and a day in prison for exploiting the Economic Injury Disaster Loan program, administered by the SBA to aid American small businesses during the pandemic. He submitted bogus applications for his companies, including four related to real estate, the U.S. Attorney’s Office said in a news release.

In July 2020, Scher submitted 12 loan applications, each amounting to $150,000, on behalf of companies he owned, including Scher Realty Group and three construction companies.

Scher, who took just four hours to file the applications, lied about gross revenue and the cost of goods sold in the preceding year.

Between July and August 2020, the companies received $1.6 million in loan proceeds from the SBA. Instead of using the funds for working capital, as required, Scher diverted the money to purchase real estate and pay credit card expenses.

In addition to the one-year prison term, 34-year-old Scher was sentenced to two years of supervised release and ordered to pay $1.6 million in forfeiture.

Scher isn’t the only person tied to real estate who engaged in fraud concerning Covid-relief funds.

Florida-based developer Eric Sheppard was convicted last week.

He allegedly stole nearly $900,000 in federal Covid-19 relief funds between March 2020 and May 2021, according to his indictment.

Last week, jurors in Miami federal court found the 55-year-old builder guilty of four counts of wire fraud and two counts of aggravated identity theft. But Sheppard was acquitted on five counts of wire fraud and three counts of aggravated identity theft. His sentencing is set for April, and he faces up to 82 years in prison.