Milwaukee, Wisconsin - A Wisconsin man was sentenced Wednesday to 36 months in prison for fraudulently seeking over $600,000 in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Stephen Smith, 42, of Milwaukee, pleaded guilty on April 12. According to court documents, Smith admitted that he fraudulently sought, on behalf of three different companies, over $600,000 in PPP loans through applications to an insured financial institution. According to his plea agreement, Smith caused fraudulent loan applications to be submitted that made numerous false and misleading statements about the companies’ respective payroll expenses. Smith then directed his co-conspirators to send him portions of the PPP funds within days of receiving them and used the proceeds for personal expenses.
In addition to the prison sentence, Smith was ordered to pay $397,500 in restitution.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Richard G. Frohling of the Eastern District of Wisconsin; Special Agent in Charge Sharon Johnson of the SBA’s Office of Inspector General (SBA-OIG) Central Region; Special Agent in Charge Robert E. Hughes of the FBI’s Milwaukee Field Office; Acting Special Agent in Charge Fran L. Mace of the Federal Deposit Insurance Corporation – OIG (FDIC-OIG); and Special Agent in Charge Kathy Enstrom of the IRS Criminal Investigation (IRS-CI) Chicago Field Office made the announcement.
The FBI, SBA-OIG, FDIC-OIG and IRS-CI investigated the case.
Trial Attorneys Laura Connelly and Leslie S. Garthwaite of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Stephen Ingraham of the Eastern District of Wisconsin are prosecuting the case.