Feds: Kansas man defrauded Intrust Bank of PPP loan money
Federal prosecutors say a Manhattan guy defrauded a Wichita lender of $127,100 in COVID-19 assist meant to aid smaller businesses afflicted by the pandemic.
The gentleman allegedly lied on his Paycheck Security Plan application, declaring his business had 15 staff members. In truth, the firm experienced zero.
Clifford Townsend is billed in U.S. District Court in Topeka with two counts of financial institution fraud, two counts of earning a fake assertion to a federally insured bank and two counts of revenue laundering.
If convicted, every bank fraud and untrue assertion demand carries a greatest penalty of 30 decades in jail and a fine of up to $1 million. The money laundering fees have greatest penalties of up to 20 several years in prison and fines of up to $250,000.
The grand jury indictment was filed April 28. In it, the U.S. Attorney’s Business office states that Townsend, a resident of Manhattan, is the registered agent and CEO of World-wide Network Corp.
Company data from the Kansas Secretary of State’s office display Townsend included the enterprise in May possibly 2019, using a Hays tackle as the registered business office. He mentioned himself as the sole owner, making use of a Manhattan condominium unit as his mailing deal with.
The business in no way filed an once-a-year report and was thus stated as forfeited in Oct 2020.
The Modest Business enterprise Administration of the U.S. governing administration presented COVID-19 support below the CARES Act by giving forgivable financial loans by way of the Paycheck Safety Program. Also recognized as PPP loans, the fiscal assistance was intended to be made use of for occupation retention and sure other expenditures during the coronavirus pandemic.
Businesses had been essential to record their range of employees and normal regular payroll expenditures, between other particulars, on their applications. Loan providers funded accredited PPP financial loans applying their own funds, which have been then certain by the SBA.
The standard PPP calculation was 2.5 occasions the common 2019 monthly payroll charges.
Prosecutors claimed that in his personal loan application with a Wichita-dependent bank, Townsend claimed the business enterprise experienced 15 staff and an normal month to month payroll of $50,857. FederalPay PPP data present World wide Community Company was detailed in the janitorial services field with a $127,100 personal loan through Intrust Financial institution, retaining 15 work opportunities.
It was all a lie, prosecutors declare. In reality, World wide Community Company had zero salaried workers and no every month payroll. Townsend allegedly despatched phony month to month payroll stories and tax varieties to the lender, which is insured by the Federal Deposit Insurance coverage Company, or FDIC.
The cash laundering rates arrive from allegedly working with about $27,000 of the income to get a BMW car or truck and wiring $80,000 into a brokerage account in the name of the small business.
Attorneys are inquiring for a funds forfeiture equivalent to the proceeds of the alleged crimes. They have previously seized about $25 from the business’s bank account and about $1,273 from the brokerage account.
Townsend’s preliminary court docket visual appeal is scheduled for Could 24.
