SAN DIEGO – A woman has pleaded guilty to fraud charges after prosecutors say she created fake employees to swindle CARES Act funds.

The U.S. Attorney’s Office said Nikole L. Edwards, 40, is founder of Social Savvy Marketing. She reportedly admitted to submitting fake tax records and payroll information in order to secure a loan under the Paycheck Protection Program, known as PPP.

The Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, authorized the Small Business Administration to guarantee hundreds of billions of dollars in forgivable loans to small businesses to pay employees through the PPP.

In order to obtain a PPP loan, a business has to provide its average monthly payroll expenses and number of employees with supporting documentation. The figures are used to calculate the amount of money the small business is eligible to receive under the PPP.

Prosecutors said in April and May 2020, Edwards applied for tens of thousands of dollars of PPP loans with three financial institutions. In her applications, Edwards falsely claimed that Social Savvy Marketing employed two individuals who earned annual salaries of $75,000 and $50,000.

In reality, prosecutors say Social Savvy Marketing didn’t have any employees. Edwards also provided false addresses and Social Security numbers for her purported employees. To further support her false claims, Edwards submitted fake W-2s.

When a representative from one financial institution told Edwards that Social Savvy Marketing could not receive a PPP loan, Edwards reportedly lied and said: “This is a lifeline for my employees and my business and we won’t survive without it.”

Despite not having any employees, Edwards ultimately succeeded in obtaining a $19,583 PPP loan. As part of her plea agreement, Edwards is required to repay the entire $19,583 loan.

Edwards is scheduled to appear for sentencing before U.S. District Judge Gonzalo Curiel on Nov. 18. She faces up to 2 years in prison and a $5,000 fine.