DTLA residents arrested in suspected COVID-19 loans scam

Two downtown Los Angeles residents were arrested Friday on a federal criminal complaint alleging they fraudulently obtained more than $300,000 — and attempted to obtain an additional $1 million — in coronavirus relief loans for several companies they claimed to own and operate.

Sean Schoepflin, 42, also known as Sean Fitzgerald, and Erika Leon, 44, also known as Erika Fitzgerald, are each charged with one count of wire fraud, according to a criminal complaint. They are expected to make their initial appearances Friday afternoon in Los Angeles federal court.

Federal prosecutors allege that from April 2020 to October 2021, Schoepflin and Leon made numerous false statements to the United States Small Business Administration to secure Economic Injury Disaster Loans for their businesses.

Schoepflin and Leon allegedly falsely stated that the business entities they created had several employees and several hundred thousand dollars in revenues, and that they would use the loans for working capital for those businesses. Schoepflin also allegedly falsely stated on loan applications that he had never been convicted of a felony.

In fact, their purported businesses — Capital Adventures Inc., Lady Capital Inc., Digital Army Ltd. and Lady Pictures LLP — had no employees and little or no revenue and they used the loans largely for personal expenses, according to the U.S. Attorney’s Office.

Schoepflin had previously been convicted of multiple felonies, according to court papers.