Henrico Man Pleads Guilty in $1.1 Million COVID-19 Fraud Scheme | justice.gov
Henrico Man Pleads Guilty in $1.1 Million COVID-19 Fraud Scheme | justice.gov
Henrico Man Pleads Guilty in $1.1 Million COVID-19 Fraud Scheme
A Henrico man pleaded guilty today to defrauding the Small Business Administration by obtaining over $1.1 million in Paycheck Protection Program (PPP) loans on behalf of two defunct companies he owned.
According to court documents, throughout 2020 and 2021, Kortney T. Kelley, 45, filed at least four fraudulent applications for PPP loans on behalf of his two non-operational companies. As part of these loan applications, Kelley made numerous false representations and certifications about the operation of these two companies, including that the companies—which had no employees— together employed more than 140 workers and paid-out over $220,000 in monthly payroll expenses. Furthermore, Kelley submitted forged tax returns and other forged documentation purporting to substantiate his false claims that his companies paid substantial payroll expenses.
Kelley spent the loan proceeds on purposes unrelated to those authorized by the Small Business Administration (SBA), including spending at least $142,711 in loan proceeds at various casinos and on gaming, and transferring at least $834,077 in loan proceeds to Kelley’s personal brokerage accounts. Kelley made further false statements to the SBA in a loan forgiveness application, which resulted in the complete discharge of the loans.
Kelley also defrauded other COVID-19 related assistance programs. Kelley submitted a separate fraudulent application under the Economic Injury Disaster Loan (EIDL) program to the SBA on behalf of one of his defunct companies, containing a false certification that loan proceeds would be used exclusively on business expenses. As a result, the SBA disbursed $10,000 to Kelley’s business bank account. Moreover, Kelley submitted fraudulent claims to the Virginia Employment Commission for unemployment benefits. The application for unemployment benefits falsely stated that Kelley was laid off from his job as a sales manager of a company that Kelley exclusively owned.
Kelley is scheduled to be sentenced on May 31. He faces a maximum penalty of 20 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Stanley M. Meador, Special Agent in Charge of the FBI Richmond Field Office, made the announcement after U.S. District Judge David J. Novak accepted the plea.
Original source can be found here
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