Source: United States Department of Justice News
PORTLAND, Ore.—A former Portland area non-profit director pleaded guilty today for stealing more than $320,000 in federal funds intended to help small businesses during the COVID-19 pandemic.
Theodore Johnson, 62, a Portland resident, pleaded guilty to one count of bank fraud.
According to court documents, in February 2017, Johnson incorporated and began serving as the director of operations for Ten Penny International Housing Foundation, an Oregon-based non-profit organization. After Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020 to provide emergency financial assistance to American employers suffering the economic effects of the COVID-19 pandemic and resulting shutdowns, Johnson saw an opportunity to fraudulently obtain government funds on Ten Penny’s behalf.
In early March 2021, Johnson submitted his first of three Paycheck Protection Program (PPP) applications, falsely claiming Ten Penny employed 16 people and had an average monthly payroll of more than $57,000. To support his application, Johnson submitted fraudulent tax documents and created an electronic counterfeit IRS stamp to make it appear as though a form had been received by the IRS. Based on these false claims, Northeast Bank issued a PPP loan worth more than $143,000 to Ten Penny.
Two months later, in May 2021, Johnson submitted two more fraudulent PPP loan applications. In these applications, he again falsely claimed Ten Penny employed 16 people and had an average monthly payroll of at least $50,000. Johnson further falsely claimed to have used the entirety of his first PPP loan for eligible expenses. As a result, Central Willamette Credit Union issued Johnson a second PPP loan worth more than $130,000.
In addition to his three fraudulent PPP loan applications, Johnson submitted a fraudulent Oregon Cares Fund application on behalf of Ten Penny and received an additional $34,975.
On October 31, 2022, Johnson was charged by criminal information with one count of bank fraud.
Johnson faces a maximum sentence of 30 years in prison, a $1 million fine and five years’ supervised release. He will be sentenced on March 16, 2023, before U.S. District Court Judge Michael H. Simon.
As part of his plea agreement, Johnson has agreed to pay more than $321,000 in restitution to Northeast Bank, Central Willamette Credit Union, the U.S. Small Business Administration, and the Oregon Department of Administrative Services.
This case was investigated by the SBA Office of Inspector General and U.S. Treasury Inspector General for Tax Administration (TIGTA). It is being prosecuted by Meredith D.M. Bateman, Assistant U.S. Attorney for the District of Oregon.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’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.