A Minnesota man is facing federal fraud charges on allegations that he defrauded the Paycheck Protection Program (PPP) of about $841,000.
The 32-year-old is the owner of a contracting and construction company through which he claimed to be entitled to a loan under the program. However, federal investigators say his company was ordered to stop doing business by the state, and the company’s contractor’s license expired at the end of last year and not renewed.
Federal investigators say the defendant submitted a loan application for a PPP loan citing the defunct firm, but it was denied. He allegedly again submitted an application for a PPP loan using the defunct firm, but the second submission was done in the name of a different person.
The defendant allegedly indicated that the defunct business had a monthly payroll of over $330,000 to pay 30 employees. He also allegedly said on the application that he was not then under indictment despite having several felony charges pending with the state. The second loan application was approved, and the participating bank transferred $841,000 in funds to his account.
Upon receipt of the funds investigators say he moved $650,000 to a bank unrelated to the defunct firm. He also allegedly used $29,000 to pay for a motorcycle and $1,000 on golf expenses.
The defendant was charged with wire fraud and money laundering last week in the court of U.S. Magistrate Judge Becky R. Thorson of the District of Minnesota. His next hearing is scheduled for this week.