Florida contractor arrested for PPP fraud, could face 30 years in prison

Dive Brief:

A Fort Myers, Florida, contractor has been arrested and charged with attempting to defraud the Paycheck Protection Program (PPP) meant to help keep workers employed during the coronavirus. Casey David Crowther, 35, has been charged with making a false statement to a lending institution. If convicted, he faces a maximum penalty of 30 years in federal prison.
According to the complaint from the United States Attorney's Office for the Middle District of Florida, Crowther sought and received more than $2 million through a PPP loan on behalf of his company, Target Roofing & Sheet Metal. Crowther allegedly submitted a loan application that included false and misleading statements concerning what the PPP funds would be used for, specifically that the PPP funds would only be used for business-related purposes, to retain workers, and maintain payroll or make mortgage payments, lease payments and utilities payments.
The complaint further alleges that within days of receiving the PPP funds, Crowther used a portion of the funds to purchase a 2020 40-foot catamaran boat for approximately $689,417, which he registered in his name. The case is being investigated by the United States Secret Service.

Dive Insight:

Crowther is not the first contractor accused of using PPP funds inappropriately. Last week, the U.S. Department of Justice indicted a St. Paul, Minnesota, contractor for allegedly defrauding the program. Kyle William Brenizer applied for and received an $841,000 PPP loan under the name of his defunct construction company, True-Cut Construction LLC, according to the complaint.

As part of the PPP application process, prosecutors allege that Brenizer submitted false employee and expense information, as well as fraudulent financial and tax documents, and then transferred $650,000 into a bank account unrelated to True-Cut.

Brenizer also allegedly failed to disclose on the PPP application, as required, that he has several criminal charges pending against him for check forgery, identify theft and theft by swindle. Penalties for knowingly submitting false information in order to secure PPP funds, according to the program application, include a maximum of 30 years in prison and fines of up to $1 million.

According to the allegations in the indictment, instead of using the PPP funds for permissible business expenses, Brenizer made a $29,000 payment to purchase a Harley-Davidson motorcycle and spent more than $1,000 on golf expenses, among other retail and entertainment expenditures for his personal benefit.

PPP loan fraud is a problem beyond the construction industry. NBC News reported last week that more than $1 billion went to companies that "double dipped" and received multiple loans in violation of the program's rules, according to a preliminary analysis released by a House of Representatives subcommittee.

Congressional investigators identified multiple areas of potential waste and fraud in the program, saying that the analysis "suggests a high risk that PPP loans may have been diverted from small businesses truly in need to ineligible businesses or even to criminals," according to the report.