Four-time felon charged with fraud in PPP loan case

by Mike Donoghue

BURLINGTON — A four-time convicted felon, who has been at the scene of multiple drug-related shootings in Burlington in recent years, has now been indicted on federal fraud charges in connection with him filing false claims for COVID-19 relief funds for his non-existent businesses, court records show.

Leon Delima, 35, of South Burlington is charged with illegally obtaining $17,833 from the Payroll Protection Program in 2021 in Vermont, the indictment said.   Delima also was indicted for falsely attempting to obtain money later under the Economic Injury Disaster Loan (EIDL) program, the indictment said.  It said his application was denied because he lied about his felony record.

Delima fraudulently claimed on his PPP application that he had $85,600 in business income from a marketing consulting firm, which was non-existent, the indictment said.  It also noted Delima listed only $1 in total income on his 2020 tax return.

Delima is facing a second felony count for unsuccessfully attempting to obtain money from a second federal relief program known as EIDL, the indictment said. He made several false claims, including he had no felony convictions in the previous five years when he had one of his convictions just two years earlier, the indictment said.

The third charge is interstate wire fraud between April 2021 and July 2021 by developing a scheme to try to unlawfully obtain money by transmitting a false PPP loan application across state lines to Benworth Capitol located in Florida, the indictment said.

No arraignment date has been set for Dilima, who is being held by the U.S. Marshal’s Service in Vermont. 

Delima obtained the $17,833 from the PPP in May 2021 and immediately went on a two-week shopping spree that included consumer goods, life expenses and other non-business items, including high-end sneakers, the indictment said.Delima knew when he filed the PPP application that he was not working as a marketing consultant, did not have employees and never earned $85,600 annually, the charges note.   The PPP program was a COVID-19 pandemic relief program overseen by the Small Business Administration that provided forgivable loans to small businesses for job retention and certain expenses.  The money could be used for payroll costs, continuing group health care benefits or mortgage interest payments, the indictment said.

The proceeds from the PPP loan could not be used by borrowers to pay for consumer goods, clothing, jewelry or to fund ordinary day-to-day living expenses. the indictment said.

Delima maintained he was a sole proprietor of a marketing consulting business and that he employed one other person.  

Once he spent the PPP money, Delima developed a second fraud plan seeking funds from the EIDL, records show.  He claimed he operated a “pet washing and grooming” business with 45 employees and that it had gross revenues of $300,000 in the calendar year before January 2020, the indictment said.

The SBA denied Delima’s EIDL application.

Delima is currently awaiting trial in U.S. District Court in Burlington on unrelated felony gun and drug charges stemming from a 2022 shooting.  During a drug arrest in 2017, Burlington Police said he had been present for at least three recent drug-related shootings.  A federal grand jury in Burlington charged Delima last fall with illegal possession of a Heckler and Koch .40-caliber pistol on July 2, 2022 while being a convicted felon.  He also was charged with knowingly and intentionally possessing cocaine on July 2, 2022 with the intent to distribute the drug, the indictment said.

Those federal charges stem from a reported shooting on North Avenue a few blocks from the Burlington Police Station.   The government said it also is seeking the forfeiture of any firearms and ammunition, including the .40-caliber pistol if he is convicted on the gun charge.

The new Chittenden County Gun Violence Task Force arrested Delima at his Suburban Square home in South Burlington last October on the federal gun and drug charges stemming from the July holiday weekend shooting in Burlington.

Nobody was injured in the shooting and investigators found casings in the area, police said.  It was among more than two dozen serious shootings that police say were reported that year in Burlington.

Delima has pleaded not guilty to the two federal charges from 2022.

Delima’s criminal record includes felony convictions for criminal possession of a loaded firearm in New York in 2006, possession of cocaine in Chittenden County in 2013, and sale of cocaine in Chittenden County in 2018, court records show.  His criminal record extends from California to Vermont with convictions also in Connecticut and New York, records show.” His charged behavior shows these convictions have not swayed him from criminal conduct,” Assistant U.S. Attorney Eugenia A. P. Cowles said in a detention motion filed in October 2022 in the gun and drug case. Federal Magistrate Kevin J. Doyle agreed and ordered Delima detained pending trial.

Doyle cited Delima’s prior criminal history, past violence and use of weapons, lack of stable employment, prior violations of probation, parole or supervised release and his participation in criminal activity while on probation, parole or supervised release.

Burlington Police said after the July 2022 incident Delima had earlier faced 6 felony charges with 3 convictions.  He also had faced 6 misdemeanor charges with 5 convictions, he had faced 5 assaultive charges with 3 convictions, and 7 violation of probation/parole charges.

His arrest record includes an obstruction of justice charge for reportedly threatening witnesses in an attempted homicide case in the Old North End of Burlington in September 2013, records show.

The Bureau of Alcohol, Tobacco, Firearms and Explosives created the violence task force last summer with partnerships with local, state and federal law enforcement officers and with federal and state prosecutors.

It is designed to target gang violence and other serious cases involving firearms.

Burlington Police officers responded to the initial calls of shots fired in the residential area and soon found two men, including Delima near Crowley Street.  Officers took Delima into custody and found a felony amount of cocaine — more than 30 grams — in his possession, police said.  The second man was released without charges. 

Burlington Police asked for state misdemeanor charges of reckless endangerment and cocaine possession.  Delima was later released on conditions from state court.  That is when federal officials stepped in so there could be more severe consequences than state court.

Categories: Crime

4 replies »

  1. Thankfully this one-man crime spree is currently “being held”. Forget all the Vermont statutes and the new federal fraud charges, just follow up on the past federal gun violations and he can be put away in club fed for a good, long time. A special thank you to all the Vermont progressive public officials who have gone out of their way over the years to crate a legal and cultural climate where predatory animals like this can feel welcome in Vermont.

  2. I just wonder if all of the PPP loans shouldn’t be audited… It seems like this handout was ripe for fraud…

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