A California man faces up to 30 years in federal prison after prosecutors say he orchestrated a massive $38 million fraud operation that exploited pandemic relief programs and deceived financial institutions with fabricated documents.

Grand Jury Brings Federal Charges

Rodney Rosenstein, 58, of Huntington Beach, California, was indicted by a federal grand jury in Tucson on charges of conspiracy to commit bank fraud and conspiracy to commit false statements to influence a financial institution. A judge ordered him held without bond while he awaits trial, according to the U.S. Attorney’s Office. The indictment alleges Rosenstein worked with accomplices to carry out two separate but overlapping fraud schemes that targeted both federal pandemic relief programs and commercial lenders.

PPP Loans and Forgiveness Fraud

Prosecutors allege Rosenstein and his co-conspirators fraudulently obtained approximately $2.9 million through 15 Paycheck Protection Program loans created under the CARES Act. The group submitted fabricated employment tax forms and W-2 documents to secure the funds, according to federal investigators. The scheme extended beyond just obtaining the loans. Rosenstein’s group also allegedly submitted fake payroll records and other misleading information to have the loans forgiven, effectively converting the borrowed funds into free money at taxpayer expense.

Commercial Loan Deception

In a separate but parallel operation, the group allegedly secured an additional $35 million by submitting falsified rent roll documents and other deceptive statements to financial institutions. The indictment details how these fraudulent materials were specifically designed to influence lenders into approving commercial loans that would not have been granted based on accurate information. The FBI Phoenix Division’s Tucson office, IRS-Criminal Investigation, and the Federal Housing Finance Agency’s Office of Inspector General jointly investigated the case.

Serious Federal Penalties

If convicted on the bank fraud conspiracy charge, Rosenstein faces a maximum sentence of 30 years in prison and a $1 million fine. The conspiracy to commit false statements charge carries a potential five-year prison sentence and a $250,000 fine. The U.S. Attorney’s Office in Tucson is prosecuting the case. The charges represent the federal government’s ongoing efforts to pursue individuals who allegedly exploited pandemic relief programs designed to help struggling American businesses and workers during the COVID-19 crisis.