RivCo Trio Plead Guilty To $3.5 Million COVID Loan Fraud

RIVERSIDE, CA — Three Riverside County residents pleaded guilty to fraudulently obtaining funds from COVID-19 business-relief loans, which led to a total loss of $3.5 million, officials announced on Thursday.

Daryl D. Knighten, Jr., 34, of Perris, pleaded guilty to one count of wire fraud on Thursday, according to the U.S. Attorney's Office.

His co-defendants, 37-year-old Vanessa M. Williams, of Corona, and 36-year-old Denise Mata, of Moreno Valley pleaded guilty on Tuesday to one count of wire fraud for their roles in the scheme.

Their sentencing hearings are scheduled for Jan. 14, 2027.

Co-defendant Mikhail G. Hoalim, 35, of Moreno Valley, has pleaded not guilty to nine counts of wire fraud and is scheduled to go to trial on Nov. 9 for his alleged role in the scheme, prosecutors said.

According to the defendants' plea agreements, Knighten, Williams, and Mata submitted fraudulent Paycheck Protection Program (PPP) loans for themselves, family members, associates, and individuals they recruited from March 2021 to August 2021, according to the U.S. Attorney's Office.

"The defendants lied to the United States Small Business Administration (SBA) and banks in connection with the fraudulent PPP loan applications. Each application falsely stated the PPP loan applicant was self-employed, and falsely certified that each loan would be used for permissible business purposes. Each loan application also contained fraudulent tax forms to deceive the SBA and PPP participating lenders into disbursing loan funds," the U.S. Attorney's Office said in a statement.

Prosecutors said lenders approved PPP loans for the defendants and more than 100 people involved in the scheme. The money was deposited into bank accounts belonging to the defendants and the fraudulent applicants. The "co-schemers" paid kickbacks to the defendants within days of receiving the fraudulently obtained PPP loan funds.

Prosecutors said Knighten, Williams, Mata, and the other people involved in the scheme used the PPP loan funds for their own personal benefit, not expenses allowable under the program. The defendants also submitted fraudulent documents to the Small Business Administration and lenders to obtain loan forgiveness for the illegally obtained PPP loans.

Knighten admitted to causing at least $145,550 in losses to the PPP loan program. Williams and Mata admitted to causing losses of at least $187,497 and $201,642, respectively.

Federal prosecutors believe the total loss resulting from the PPP loan scheme is approximately $3.5 million.

U.S. District Judge Kenly Kiya Kato scheduled a Jan. 14, 2027 sentencing hearing for Knighten.

Knighten, Williams and Mata face a statutory maximum sentence of 20 years in federal prison, according to the U.S. Attorney's Office.