They say the best thing about having a sibling is you always have a partner in crime. Eric and Anthony Karnezis apparently took that too literally. On March 25, 2025, Karnezis and Karnezis pleaded guilty for conspiring with one another and others to defraud the U.S. Small Business Administration (SBA) out of millions in Paycheck Protection Program (PPP) loans. No small-time crime for these two brothers, they stole nearly $109 million from the U.S. taxpayer.
From January 2021 until at least March 2022, Eric Karnezis carried out a scheme whereby he gathered false and fraudulent business information from customers and used the information to submit at least 1,300 fraudulent PPP loan applications. To facilitate the scheme, Eric Karnezis created fictious documents to support the fraudulent loan applications, including false payroll information and tax documents. Approximately $105 million in loans were funded in response to the fraudulent applications. Karnezis received $3 million in fees from his customers for submitting the fraudulent applications.
Following in his brother’s footsteps, Anthony Karnezis carried out a similar scheme whereby he also conspired to gather fraudulent business information from customers to submit at least 140 fraudulent PPP loan applications. Based on false and misrepresented information, more than $3.9 million in loans were funded in response to these fraudulent applications. Anthony also received a fee from customers for his role in the conspiracy, although at a lesser amount of $957,000.
Hope there is no sibling rivalry between the two brothers because regardless of which one stole more money from the U.S. taxpayer, both will be going to prison for fraud. Sentencing has yet to be scheduled.
This case was investigated by the SBA Office of Inspector General (SBA-OIG),
Today’s Fraud of The Day is based on article “Sedona brothers scammed government out of over $100M in COVID-19 relief fund” published by The Arizona Republic on March 25, 2025.
Two brothers from Arizona pleaded guilty to conspiring to commit wire fraud for their roles in defrauding the federal government out of more than $100 million in COVID-19 relief funds. Eric and Anthony Karnezis of Sedona entered guilty pleas in two separate but related cases on March 20 in the U.S. District Court for Oregon.
The scheme occurred in both 2021 and 2022 and involved the brothers submitting hundreds of fraudulent Paycheck Protection Program loan applications, which were based on false payroll information and tax documents, according to a statement from the U.S. Attorney’s Office for the District of Oregon.
