By Arturo Castañares
Editor-at-Large

A local political consultant was sentenced 45 days in a residential halfway house without any jail time after pleading guilty to two felony counts of grand theft of public funds related to a fraudulent COVID-era federal loan and for taking unemployment benefits while he was still working.

Jesús Cárdenas, 41, faced up to one year in County jail after he pleaded guilty on February 28th under a plea deal where prosecutors agreed not to seek more than one year custody in exchange for his guilty plea on two of six felony charges he faced.

Judge Rachel Cano sentenced Cárdenas to 180 days of punishment consisting of 45 days in a halfway house beginning April 17th then 135 days of alternative probation program without requiring him to serve any time in jail.

Cardenas, now a convicted felon, will also serve two years of felony probation where he will be subject to prison time if he commits any crimes.  

The judge also ordered that Cardenas pay restitution of $176,244, the amount of the fraudulent federal loan, as well as $26,700 to reimburse the state for unemployment benefits he fraudulently received in 2020 while he was working. 

Cárdenas could have faced three years and eight months in state prison under the state sentencing guidelines for the two felonies without the plea deal.

The plea deal to drop four felony counts in exchange for pleading guilty to two felony counts of grand theft of more than than $200,000 will put District Attorney Summer Stephan in a tough political position when she is campaigning for reforming California's Proposition 47 which lowered criminal charges for grand theft and larceny which she and other politicians blame for a rise on retail theft since its passage by voters in 2014. 

The conviction came under an indictment of Cárdenas and his younger sister, Andrea Cárdenas, who served on the Chula Vista City Council from December 2020 until she resigned last month just one week before they both pleaded guilty under the plea deal.

Andrea Cárdenas, 32, was facing eight felony counts related to the same $176,244 Paycheck Protection Program (PPP) federal loan their company, Grassroots Resources, took in May 2021.

Andrea Cárdenas

 

The siblings admitted they filed a fraudulent application in February 2021 for the PPP program using the names of 34 employees of Harbor Collective, a local marijuana dispensary that is a client of their consulting firm.

Their company never had 34 employees during the period of time required to qualify for the PPP loan program.

Prosecutors claim the siblings used the loan proceeds to pay off personal credit cards, transfer money to other people, and to pay $33,000 in outstanding campaign debts from Andrea’s 2020 election.

At the time they submitted the fraudulent loan application, Jesús Cárdenas was serving as Chief of Staff to San Diego City Councilman Stephen Whitburn, and Andrea was on the Chula Vista City Council after having been elected in November 2020.

La Prensa San Diego first broke the story of their fraudulent PPP loan in February 2023 after finding their application information through an online search listing provided by the federal Pandemic Response Accountability Committee (PRAC). 

Cárdenas spoke with La Prensa San Diego for over 2 1/2 hours and admitted to having used the names of Harbor Collective’s employees, although he explained at the time that Grassroots Resources had employed the workers during a period when marijuana dispensaries were “unbankable” meaning they could not deposit cash into banks.

The PPP loan program was an SBA-backed loan created to help businesses keep their workforce employed during the COVID-19 crisis. In total, over 11.8 million loans were given out to businesses, with nearly 10.5 million loans having later been forgiven after business proved they used the loan proceeds properly.

Grassroots Resources never applied for loan forgiveness and still owe their entire loan amount.

San Diego County District Attorney Summer Stephan’s office indicted the siblings on November 1, 2023, charging them with several felony counts including for conspiracy, grand theft, and money laundering.

Jesús was facing five felony counts while Andrea faced seven counts.

Andrea Cárdenas resigned her seat on the Chula Vista City Council on February 19, 2024, but continued to be a candidate for re-election on the March 5th ballot.

On February 20, 2024, the DA’s office added an additional felony count to each sibling for grand theft of funds from the State Unemployment Insurance Fund for fraudulently claiming unemployment benefits while they were earning income from campaigns and consulting services.

The following week, both siblings agreed to a plea deal with Stephan’s office where they each pleaded guilty to two felony counts of grand theft of more than $950 in exchange for prosecutors agreeing not to seek more than one year in county jail instead of three years and eight months in state prison. All of the other charges were dropped.

Jesús Cárdenas agreed to be sentenced on his two felony courts on March 27th, but prosecutors agreed to withhold sentencing for Andrea until August 28th and allowed her to argue for the judge to reduce her felonies to misdemeanors at sentencing.

Under their plea deal, both siblings will also serve two years of probation.

Andrea Cárdenas finished in 5th place among six candidates who ran for her former seat on the Chula Vista City Council on the March 5th ballot.