SALT LAKE CITY, Utah (ABC4 News) -A 64-year-old Salt Lake City man pleaded guilty in federal court to fraud in information he provided when he applied for the Paycheck Protection Program loan.
Michael Leroi Douros was charged with two counts of bank fraud, two counts of making a false statement to a bank, and money laundering.
“The President and Congress dedicated taxpayer funds to offer relief and hope during this extraordinarily challenging time for our nation. It is disappointing, to say the least, to see an individual use fraud and selfish motives to acquire hundreds of thousands of dollars,” U.S. Attorney John W. Huber said today. “This money could have been used to help reduce the strain on other employers and their employees, who would have qualified for the funds.”
The PPP application process requires applicants to submit an application form through an SBA-approved financial entity and allow qualifying small businesses and other organizations to receive loans through the Small Business Administration.
Proceeds must be used for payroll costs, interest on mortgages, rent, and utilities.
According to court documents, Douros falsified information on his applications at two banks in an effort to get a PPP loan for his business, Epic Rentals UT LLC.
The false statements included misrepresentations regarding the businesses monthly payroll and the number of employees the business had.
Douros claimed his son owned 50 percent of Epic Rentals when, in fact, his son was a straw owner and did not own any portion of the business. Douros has a previous felony conviction that he also did not disclose on his application.
Zions Bank initially funded a loan of $198,000 but canceled the loan transfer after identifying the misinformation. Douros then submitted a second PPP loan application through Cache Valley Bank, which was funded at $239,091.67.
Douros’ money laundering conviction relates to a $20,000 payroll check made payable to the defendant from an Epic Rentals bank account.
Sentencing in the case will be Nov. 17 at 2 p.m. before U.S. District Judge Howard C. Nielson Jr.
The potential penalty for the two bank fraud counts and the two false statements to a bank counts is 30 years per count. The potential penalty for money laundering is 10 years in federal prison. He faces a potential $1 million fine.
Assistant U.S. Attorneys in the Utah U.S. Attorney’s Office are prosecuting the case. FBI special agents are investigating the matter.
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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form