Arizona man pleads guilty to submitting 70 fraudulent loan applications to $ 4 million Covid-19 wire rope fraud program | USAO-CO


DENVER – Michael Lain, 56, of Queen Creek, Ariz., Pleaded guilty today to wire fraud before U.S. District Judge William J. Martinez. His sentencing hearing has been set for December 3, 2021.

On March 27, 2020, the President of the United States enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provides emergency aid, administered by the Small Business Administration (SBA) of the United States, to small business owners. affected by the coronavirus pandemic (COVID-19). The two main sources of funding for small businesses were the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL) program.

From March to June 2020, defendant Michael Lain submitted fraudulent EIDL applications to the SBA on behalf of more than 70 LLCs seeking both loans and grants from the program. In these claims, Lain misrepresented the number of LLC employees, gross income, and cost of goods sold in the 12 months leading up to January 30, 2020. He also falsely agreed to use the funds only as working capital for LLCs. when he intended to use the funds for other purposes, including buying a new home. Seventy of its EIDL applications were approved and funded by the SBA from its Denver Finance Center. As a result of his misrepresentation, Lain’s LLCs received $ 3,830,400 in EIDL proceeds and $ 336,000 in Economic Disaster Grant (EIDG) proceeds. As part of his plea deal, Lain agreed to pay restitution and also reimburse $ 294,900 that he received as a result of fraudulent PPP claims that he also submitted to the SBA.

“Anyone who uses lies and deception to defraud the generosity of the US taxpayer can expect to find the US attorney’s office and its law enforcement partners on guard,” warned US Assistant Prosecutor J Chris Larson. “Taxpayers want these funds to be used as intended – to save businesses hit hard by the pandemic, not to line the pockets of criminals. “

“Today’s announcement is expected to have a strong deterrent effect on anyone considering committing COVID-19-related fraud,” said Marc DellaSala, special agent in charge of the Denver Secret Service Office. “Actions by the Secret Service, our funding partners, and the United States Attorney’s Office are ensuring that Small Business Administration economic disaster loans reach those whose livelihoods suffered during the global health crisis.” . The Secret Service is committed to protecting the financial infrastructure of the United States from the individuals and organizations that attempt to profit from taxpayer-funded stimulus packages at the expense of small American businesses.

“Lying to gain access to economic stimulus funds for personal gain will be brought to justice,” said Weston King, the special agent in charge of the Western Region of the SBA OIG. “SBA OIG will aggressively pursue evidence of fraud against SBA programs aimed at helping small businesses across the country grappling with the challenges of the pandemic. I want to thank the United States Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice. “

The United States Secret Service and the Small Business Administration-Office of Inspector General investigated the case as part of their work on the Colorado-based EIDL Fraud Task Force. Assistant U.S. Attorneys Pegeen Rhyne and Patricia Davies are handling the prosecutions.

CASE NUMBER: 21-cr-00175-WJM

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