A Carlisle man has been charged by criminal information with perpetrating a wire fraud and money laundering scheme that sought $467,200 in COVID-19 relief funds guaranteed by the U.S. Small Business Administration through the Paycheck Protection Program.
The U.S. Attorney’s Office for the Middle District of Pennsylvania announced charges against Keith McConnell, 43, of Carlisle on Friday.
According to acting U.S. Attorney Bruce D. Brandler, the criminal information alleges that McConnell submitted fraudulent PPP loan applications and forged documents on behalf of his Carlisle-area trucking company, KB Transportation.
In 2019 and 2020, KB Transportation LLC was not in business, had no employees, and had no payroll expenses.
On June 5, 2020, however, McConnell falsely certified that KB Transportation employed 26 employees and had monthly payroll expenses totaling $124,800, Brandler said.
McConnell received $312,000 in PPP loan proceeds, the news release said.
Within weeks, McConnell and his co-conspirators, who were not named in the news release announcing the charges, spent the funds on a residential property, two vehicles, and stock market investments.
According to Brandler, McConnell applied for a second PPP loan in the amount of $155,200 for KB Transportation on Jan. 20 and again submitted false and fraudulent loan applications and documents.
The second PPP loan was never disbursed.
The PPP was designed to help small businesses facing financial difficulties during the COVID-19 pandemic.
Funded by the March 27, 2020 Coronavirus Aid, Relief and Economic Security Act, PPP funds were offered in forgivable loans to small businesses for employee job retention and certain other expenses.
PPP loan amounts were determined by the number of employees and average monthly payroll costs.
The case was investigated by the Internal Revenue Service-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Samuel S. Dalke.
The maximum penalty under federal law for the most serious offense charged is 30 years of imprisonment, a term of supervised release following imprisonment, and a $1,000,000 fine.
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