Two American businessmen have pleaded guilty to money laundering and abusing a pandemic relief programme by claiming money for non-existent workers.
The two secured money from the government’s paycheck protection program (PPP), which was intended to help companies survive the collapse in business brought by Covid-19.
On 1 May last year, Andrew Lloyd, 51, submitted a PPP loan application under the business name of his friend, Russell Schort. According to the Department of Justice, the claim for Schort Lee Construction included $3m of false wage statements for 56 fake employees.
Following the application, Schort received a pay-out of $600,000 and then transferred $307,000 to Lloyd.
On 5 January, Schort, 39, was charged with wire fraud, bank fraud and money laundering. He now faces a maximum sentence of 30 years in prison, a $1m fine and five years of supervised release. He will be sentenced on 21 October.
Lloyd will be sentenced on 9 September, with a recommended 61-month prison sentence.
As part of their plea deals, Lloyd will pay $3.6m in restitution to the US Treasury and Schort will pay $294,552.
Scott Asphaug, acting US attorney for the District of Oregon, said: "CARES Act relief programs were designed to help American small businesses weather a historically difficult time in our nation’s economic history. Andrew Lloyd saw an opportunity to profit off the Covid-19 pandemic and did so at the expense of hardworking Americans."
Corinne Kalve, acting special agent in charge of IRS Criminal Investigation, said: "Lying to gain access to economic stimulus funds will be met with justice."
Image Â©GCR, illustration by Denis Carrier