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Former Assistant District Attorney
Former Assistant U.S. Attorney

Man accused of fraudulently acquiring federal relief funds

On Behalf of | May 23, 2021 | Federal Crimes

The federal government offered numerous programs to help small businesses keep employees on the payroll during the recent health and financial crisis. One such program was the Paycheck Protection Program, wherein business owners could apply for loans to cover payroll and other specific business expenses. After using the funds appropriately, the borrowers could then apply for partial or complete loan forgiveness. In this way, small businesses had a better chance of remaining afloat during the economic crisis. However, one Mississippi business owner is facing federal fraud charges for allegedly misusing those funds. 

The man reportedly owned four separate businesses related to natural-made candles and bath products and applied for PPP loans for each of the businesses. Investigators claim the 45-year-old man did not report that these businesses were already failing when he applied for PPP loans. Additionally, application documents state the businesses employed 743 workers, which was apparently an overstatement. The business owner received over $6 million in PPP loans. 

Where did the money go? 

Investigators believe that the man did not use the federal money to shore up his business and pay employees. Instead, he allegedly purchased a Tesla vehicle, a 5,000-square-foot, $1 million home, and over a million in stock trades through Robinhood. Each of these and other purchases apparently accompanied transfers of loan money from his business accounts to his personal accounts. 

The misuse of federal program funds carries serious ramifications. The man now faces numerous federal fraud charges, including wire fraud, making false statements to a financial institution and 11 counts of money laundering. If a court convicts him, he could receive as long as 30 years in prison.