PPP Loan Fraud – Poconos Resident Faces Charges for Alleged $2.2 Million COVID Relief Fraud
A man from Monroe County, Pennsylvania is potentially facing a lengthy prison term of up to 40 years due to allegations of defrauding the federal government of pandemic relief funds. These funds were purportedly misused on personal expenditures including a boat, vehicles, real estate, and luxury shopping, when in fact, they were purposed to be used on employees
The United States Attorney’s Office for the Middle District of Pennsylvania disclosed that the individual was formally charged on July 27 with wire fraud and money laundering. In conjunction, a plea agreement was also submitted on the same day. The Defendant has consented to forego indictment by a grand jury and intends to plead guilty to the aforementioned charges as outlined in a felony information document presented by the U.S. Attorney for the Middle District of Pennsylvania.
The Defendant allegedly owned and operated multiple business entities in Pennsylvania and Florida. It is alleged that he submitted around 20 fraudulent applications for pandemic relief funds, including those designated under the Paycheck Protection Program (PPP) and Economic Injury and Disaster Loans (EIDLs). These applications were purportedly made on behalf of entities with no genuine business operations, featuring exaggerated revenues, inflated employee counts, and fabricated financial data. In addition, the applications included a counterfeit IRS income tax return and falsified federal employment tax documents.
The accusation against claims that he received over $2.2 million in PPP and EIDL funds through these fraudulent applications, channeling the funds towards personal expenses such as a boat, golf cart, multiple automobiles, real estate, and extravagant retail purchases, which encompassed high-end watches and handbags. The charges also include allegations of money laundering in an attempt to conceal the illicit gains.
Each individual charge carries a maximum penalty of 20 years in prison. The combined maximum potential sentence for both charges is 40 years of imprisonment, fines amounting to $750,000, three years of supervised release, the expenses related to prosecution, disqualification from specific federal benefits, and an assessment totaling $200.
PPP loan fraud was found to be rampant and just now the federal government is catching up to the billions that were absconded by unscrupulous individuals. Some cases of PPP loan fraud are filed through whistleblowers under the False Claims Act who are entitled to a percentage of what the government recovers.