On Wednesday, San Diego County District Attorney Summer Stephan announced that Jesus Cardenas, brother of former Chula Vista council member Andrea Cardenas was sentenced on grand theft charges. Both Jesus Cardenas and Andrea Cardenas pleaded guilty to seven felonies in February, after originally pleading not guilty to all charges.
Jesus Cardenas pleaded guilty to fraud related to funds obtained from the federal Paycheck Protection Program and the state Employment Development Department. Cardenas acknowledged cheating the U.S. government out of $176,000 in COVID-19 relief funds which he laundered and used to pay for personal expenses. He also unlawfully applied for over $26,000 in unemployment benefits.
Jesus Cardenas was sentenced to 45 days in work furlough, 135 days in home detention, and two years formal probation for committing two felony counts of grand theft. Superior Court Judge Rachel Carno ordered that Jesus Cardenas must submit to search and seizure, must operate any business in compliance with all rules and regulations including being licensed, paying taxes, and complying with campaign finance laws. He must also pay back the full amount of the funds he stole, including $176,227 to the Small Business Administration joint and several with co-defendant Andrea Cardenas, $26,700 to the Employment Development Department, and an amount to be determined by the Franchise Tax Board.
If he violates the terms of his probation, he could be ordered to serve up to two years and eight months in custody.
“Our dedicated prosecution team conducted a thorough investigation resulting in the service of 27 search warrants to examine financial and email accounts,” Stephan said in the press release. “They uncovered and proved that Cardenas had engaged in multiple fraud schemes over several years. In these types of cases, we often rely on the public, the media, or people who suspect wrongdoing to report potential public integrity crimes to our office so we can investigate. Members of the public, and members of local media outlets like La Prensa deserve recognition for their reporting, which helped bring this case to light.”
In February 2021, Cardenas filed for a Paycheck Protection Program Loan from the Small Business Administration via PayPal. He misrepresented multiple items on the application, including that Grassroots had 34 employees, when these 30 of these individuals worked for Harbor Collective, that they were not engaged in activity illegal under federal law, and that they were not a business engaged in political consulting; and that the loan funds would be used to cover payroll expenses. The loan was approved.
On May 3, 2021, the $176,227 of PPP loan funds were deposited into a Grassroots Business account. Over the course of the next two weeks, the money was transferred between two different Grassroots accounts. From there, Cardenas used the PPP funds to pay off multiple personal expenses including $21,000 owed to American Express and he transferred $35,000 to his sister, Andrea Cardenas’ personal Wells Fargo account where much of it was used to pay of campaign debt she owed.
Andrea Cardenas is scheduled for sentencing in August.
