Date: 02-24-2021

Case Style:

Case Number: 2:20-cr-00196-BHL

Judge: Brett Ludwig

Court: United States District Court for the Eastern District of Wisconsin (Milwaukee County)

Plaintiff's Attorney: United States District Attorney’s Office

Defendant's Attorney:

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Description: Milwaukee, Wisconsin fraud charge criminal defense lawyer represented Defendant, Thomas Smith, age 46, with one count of bank fraud for his role in fraudulently obtaining over $1 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Smith admitted that he fraudulently sought over $1.2 million in PPP loans through applications to an insured financial institution on behalf of eight different companies. 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. Based on these representations, the financial institution approved and funded over $1 million in loans. 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, he admitted.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding, and in December 2020, Congress authorized another $284 billion in additional funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

This case was investigated by the SBA-OIG, FBI, FDIC-OIG, and IRS-CI. 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.

18:1344(2) and 2 - BANK FRAUD
(1-6)
18:1957 and 2 - MONEY LAUNDERING
(9)
18:1957 and 2 - MONEY LAUNDERING
(11-13)

Outcome: Defendant pleaded guilty.

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Defendant's Experts:

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