Manfred A. Pentzke Lemus was sentenced on January 28, 2026, to more than eight years in federal prison for leading a multi-million dollar scheme to obtain COVID-19 relief funds through fraud. United States District Court Judge Aida Delgado-Colón also ordered the forfeiture of $488,674.28 and restitution of $2,185,519.85.
Pentzke Lemus pleaded guilty on September 24, 2025, to conspiracy to commit wire fraud and conspiracy to commit money laundering.
According to court documents, Pentzke Lemus organized and led a plan that defrauded the United States Small Business Administration and Oriental Bank by exploiting the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. He and his co-conspirators submitted hundreds of fraudulent applications using false financial data and fabricated documents such as falsified tax forms. Pentzke coordinated these applications by inserting fictitious payroll and income figures and monitoring their approval and disbursement.
As a result of this scheme, 223 fraudulent PPP loans were processed with $5,915,290.33 disbursed. The SBA also released $3,105,300 in EIDL funds due to the fraudulent activity.
Recruits paid kickbacks disguised as business transactions to Pentzke or companies he controlled; he received 100 kickbacks totaling $486,277.70. The operation involved multiple layers of recruitment, falsified documentation, and structured payments.
“Today’s sentence reflects the seriousness of exploiting emergency relief programs for personal gain,” said W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. “These funds were intended to support businesses and workers during a national crisis, an unprecedented emergency, not to enrich individuals through fraud; and those who engage in fraud will be held accountable. I commend and thank the agents and prosecutors for their outstanding work on the investigation and prosecution of this case.”
Two co-defendants have been sentenced while three others are awaiting sentencing.
The investigation was conducted by several agencies including the United States Secret Service; Small Business Administration Office of Inspector General; Treasury Inspector General for Tax Administration; Internal Revenue Service Criminal Investigations; Puerto Rico Treasury Department; Puerto Rico Bureau of Special Investigations; Puerto Rico Police Bureau; and Guaynabo Municipal Police. Assistant U.S. Attorney Daniel J. Olinghouse prosecuted the case.
The CARES Act authorized federal assistance through SBA loans such as EIDL for small businesses affected by revenue loss during the pandemic period. Applicants were required to provide operational details from before COVID-19 hit—including employee numbers, gross revenues realized, and cost of goods sold—to qualify for assistance like PPP forgivable loans aimed at job retention or covering expenses such as mortgage interest or utilities.
The U.S. Attorney for the District of Puerto Rico is responsible for prosecuting federal crimes including public corruption cases within its jurisdiction based in San Juan (official website). The office handles both criminal prosecutions and civil litigation across all federal law enforcement matters affecting Puerto Rico (official website). It offers mechanisms for reporting crimes or fraud as part of its commitment to public safety (official website).
