Source: United States Department of Justice News
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced that Keith McConnell, age 43, of Carlisle, Pennsylvania, was sentenced yesterday to 18 months’ imprisonment by United States District Court Judge Christopher C. Conner for perpetrating a wire fraud and money laundering scheme which sought $467,200 in COVID-19 relief funds guaranteed by the U.S. Small Business Administration through the Paycheck Protection Program (PPP).
The PPP was designed to help small businesses facing financial difficulties during the COVID-19 pandemic. Funded by the March 27, 2020 Coronavirus Aid, Relief and Economic Security (CARES) Act, PPP funds were offered in forgivable loans to small businesses for employee job retention and certain other expenses. PPP loan amounts were determined by the number of employees and average monthly payroll costs.
According to United States Attorney John C. Gurganus, McConnell submitted fraudulent PPP loan applications and forged documents on behalf of his Carlisle-area trucking company, KB Transportation LLC. In both 2019 and 2020, KB Transportation LLC was not in business, had no employees, and had no payroll expenses. On June 5, 2020, however, McConnell falsely certified that KB Transportation LLC employed twenty-six employees and had monthly payroll expenses totaling $124,800. As a result of the fraud, McConnell received $312,000 in PPP loan proceeds. Within weeks, McConnell spent the PPP funds on unauthorized expenditures including the purchase of a residential property, two personal vehicles, cash withdrawals, and stock market investments. On January 20, 2021, McConnell used KB Transportation LLC to apply for a second PPP loan in the amount of $155,200, and again submitted false and fraudulent loan applications and documents. The second PPP loan was never disbursed.
In addition to the 18-month prison sentence, the Court ordered Keith McConnell to serve three years of supervised release following incarceration, and to pay $312,200 in restitution for disbursement to the victims of his crimes. To date, McConnell has paid back $237,515.50 in restitution.
The case was investigated by the Internal Revenue Service-Criminal Investigation (IRS-CI). Assistant U.S. Attorney Samuel S. Dalke prosecuted the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’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 (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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