A Jacksonville man who ran companies together with a charity for households of troopers killed in Iraq and Afghanistan has pleaded guilty to fraud and cash laundering involving COVID-era paycheck protection loans, prosecutors reported.
Kenneth S. Landers, 57, has agreed to give up $910,000 the U.S. Justice Division referred to as proceeds of wire fraud in addition to a house and a enterprise the federal government stated the fraud funded, the U.S. Lawyer’s Workplace stated in a release.
Landers additionally faces the potential for a jail sentence so long as 30 years, though no sentencing has been scheduled but.
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Landers, founder and longtime president of a nonprofit referred to as the The American Fallen Veteran Service Project Inc., was charged last month with the 2 crimes, which the federal government stated stemmed from 10 Paycheck Safety Program loans totaling $1.4 million he utilized for on behalf of 4 companies he ran.
Seven loans had been ultimately accepted.
The federally backed loans, issued via non-public lenders, had been created by Congress in the course of the early months of the COVID-19 pandemic as a manner for companies to meet payroll and different fundamental bills whereas hundreds of thousands of individuals had been dwelling as a result of of public well being orders.
The loans had been written to be forgivable if debtors adopted a collection of guidelines, prompting some individuals to discuss in regards to the advances as “free money.”
However prosecutors stated Landers broke the regulation whereas he chased loans, utilizing bogus paperwork to persuade one lender the veteran service charity had spent $960,000 on its workers the yr earlier than the pandemic started.
The mortgage software included a kind that employers are supposed to file with the Inner Income Service, however prosecutors claimed in January that the IRS hadn’t obtained that kind from the charity for 2019 or another years.
That lender superior $200,000 to Landers, prosecutors stated in courtroom filings, and so much was rapidly utilized in methods the paycheck-protection program didn’t enable.
The identical day the mortgage reached the financial institution, prosecutors had contended, Landers wired $87,000 from the previously-empty account to a automotive seller for a 1970 Jaguar JKE Roadster, a traditional collectable automotive.
Prosecutors stated cash from varied loans was ultimately used to purchase an 18-karat gold Rolex and repay mortgages on a house in Clifton and a enterprise on North Essential Road that housed Tire Empire, one of his corporations.
“The proceeds of a PPP mortgage weren’t permitted to be utilized by the debtors to buy shopper items, vehicles, private residences, clothes, jewellery,” or different private bills, prosecutors wrote in a courtroom submitting in January.
The U.S. Small Enterprise Administration’s inspector basic reported final yr that PPP concerned “an unprecedented stage of fraud exercise” and described 70,000 loans totaling $4.6 billion as “probably fraudulent.”
The discharge from prosecutors stated the Justice Division “stays vigilant” in investigating and prosecuting crimes involving COVID reduction.
This text initially appeared on Florida Instances-Union: Jacksonville man loses $910K, plus real estate, over COVID loan fraud
