Milwaukee Man Sentenced for Role in COVID-19 Relief Fraud Program | USAO-EDWI
Acting U.S. Attorney Richard G. Frohling of the Eastern District of Wisconsin joined Acting Deputy Attorney General Nicholas L. McQuaid of the Criminal Division of the Department of Justice and other federal officials in announcing that July 14 2021 Stephen Smith, (42), of Milwaukee, WI was sentenced today to 36 months in prison for fraudulently seeking more than $ 600,000 in Paycheck Protection Program (P3) guaranteed loans. Small Business Administration (SBA) under the CARES Act (Coronavirus Aid, Relief, and Economic Security).
Smith, 42, of Milwaukee, pleaded guilty on April 12. According to court documents, Smith admitted to fraudulently soliciting, on behalf of three different companies, more than $ 600,000 in PPP loans through applications from an insured financial institution. According to his plea deal, Smith had fraudulent loan applications submitted which made numerous false and misleading statements about the companies’ respective salary expenses. Smith then ordered his co-conspirators to send him some of the P3 funds within days of receiving them and used the proceeds for personal expenses.
In addition to the jail term, Smith was ordered to pay $ 397,500 in restitution.
The FBI, SBA-OIG, FDIC-OIG, and IRS-CI have investigated the case.
Trial prosecutors Laura Connelly and Leslie S. Garthwaite of the Fraud Section of the Criminal Division and Assistant US Attorney Stephen Ingraham of the Eastern District of Wisconsin are continuing the case.
The Fraud Section leads the ministry’s prosecution of fraud schemes that exploit the PPP. In the months following the start of the PPP, Fraud Section lawyers prosecuted more than 100 defendants in more than 70 criminal cases.
The Fraud Section also seized more than $ 65 million in cash proceeds from fraudulently obtained PPP funds, as well as numerous real estate and luxury items purchased with these products. For more information, visit: https://www.justice.gov/criminal-fraud/ppp-fraud.
In May, the Attorney General established the COVID-19 Enforcement Task Force to mobilize resources from the Department of Justice in partnership with government agencies to strengthen efforts to combat and prevent fraud related to the pandemic. The Working Group strengthens efforts to investigate and prosecute the most culpable national and international criminal actors and assists agencies responsible for administering relief programs to prevent fraud, among other methods, by scaling up and integrating mechanisms coordination, identifying resources and techniques for learning about their programs, and sharing and leveraging information and knowledge gained from previous enforcement efforts. For more information on the ministry’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF online complaint form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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For more information, contact:
Public Information Officer Kenneth Gales 414-297-1700