Wendy Nicole Villatoro, a former public official in Washington, D.C., has been sentenced to 15 months in federal prison for fraudulently obtaining $844,000 in COVID-19 relief funds. The funds were meant to help struggling businesses survive the economic impact of the pandemic. Instead, Villatoro used the money for personal expenses, including paying off student loans, purchasing a luxury vehicle, and buying expensive designer items.
The sentencing took place on February 28, 2025, in U.S. District Court. In addition to the prison term, the judge, Honorable Carl J. Nichols, ordered Villatoro to serve two years of supervised release. She was also required to pay back the stolen money and surrender any luxury items bought with the fraudulent funds.
How the Fraud Happened
Between March 2020 and August 2021, Villatoro submitted multiple fraudulent loan applications. These applications were made under the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, both of which were created to help small businesses during the COVID-19 crisis.
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Villatoro applied for eight PPP loans and 15 EIDL loans using false information. The applications included fake business details, inflated employee numbers, and exaggerated financial records. This deception was aimed at securing large sums of money from the government. In total, she attempted to steal between $2.6 million and $5.5 million, but most of the fraudulent applications were denied. However, over $844,000 was successfully obtained.
Rather than using the funds for business purposes, Villatoro misused the money for personal gain. The funds were spent on clearing student loan debt, paying off a car loan for a BMW SUV, and purchasing luxury clothing and jewelry.
Federal investigators discovered that Villatoro had also attempted to apply for additional funds using multiple fake businesses. Some applications claimed non-existent employees, while others significantly exaggerated payroll expenses. By using falsified documents, she sought to manipulate the system and obtain millions in fraudulent funds. However, authorities flagged many of her applications as suspicious, preventing her from securing more money.
The Government’s Investigation and Sentencing
Authorities from the U.S. Department of Agriculture’s Office of Inspector General (USDA-OIG) and the U.S. Small Business Administration’s Office of Inspector General (SBA-OIG) launched an investigation into the fraud. The U.S. Attorney’s Office, led by U.S. Attorney Edward R. Martin, Jr., along with support from the FBI Washington Field Office Asset Forfeiture Unit, built a case that led to Villatoro’s conviction.
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After pleading guilty to bank fraud on November 14, 2024, Villatoro faced sentencing. As part of the plea agreement, she agreed to return $844,415.24 to the U.S. government and forfeit assets, including over 70 pieces of designer items and the luxury vehicle.
During the court proceedings, prosecutors emphasized how Villatoro, despite being a former public servant, abused her position to steal from programs designed to help struggling small businesses. The judge noted that her actions not only harmed taxpayers but also deprived legitimate businesses of the aid they desperately needed during the pandemic.
The Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) programs were created under the CARES Act in 2020 to provide financial support to small businesses struggling due to the pandemic. These programs were meant to help business owners keep employees on payroll, pay rent, and cover essential expenses. Fraudsters who took advantage of these relief funds faced strict legal consequences, as seen in this case.
This case serves as a reminder that government agencies remain vigilant in identifying and prosecuting those who attempt to exploit emergency financial programs for personal gain.
