Mountain Home man sentenced to 63 months for covid fund fraud
A Mountain Home man was sentenced to 63 months in prison on Monday after pleading guilty in March to abusing various Covid-19 economic aid programs.
James Read, 45, forged documents to apply for Small Business Administration loans for struggling businesses during the pandemic, according to a press release from the U.S. Attorney’s Office in Fort Smith.
“Read has also applied for pandemic unemployment assistance, on behalf of himself and others, in several states although he is not eligible for the funds,” the statement said. “The Court ordered Read to pay $ 277,827 in restitution for the funds obtained fraudulently.”
According to a plea agreement filed in federal court on March 17, Read “agrees to waive indictment by grand jury, consents to filing of information accusing defendant of misrepresentation, in violation of 18 USC § 1001 (a) (3), money laundering, in violation of 18 USC § 1957, and wire fraud, in violation of 18 USC § 1343. The defendant further agrees to plead guilty to the ‘information.
Read filed an application with the Small Business Administration for payment protection program funds, claiming he owned 100% of a company called Snowbirdbob LLC with an average monthly payroll of $ 22,308, according to the agreement. advocacy.
In addition to the request, Read submitted a forged IRS Schedule C (Business Profit or Loss), which represented that Snowbirdbob LLC had gross sales of $ 1.2 million in 2019 and net income. of $ 267,700 “, according to the plea agreement.
Under the Coronavirus Aid, Relief and Economic Security Act, the Payment Protection Program provided forgivable loans to businesses struggling with essential expenses, such as payroll, during the pandemic. .
On December 11, federal agents questioned Read, who admitted to falsifying the numbers on his loan application and making up the numbers in his Schedule C, according to the plea agreement.
Read’s loan application was approved and $ 55,770 was transferred to his bank account on June 29, 2020.
Shortly after receiving the loan, Read purchased a 2017 GMC Sierra truck from Lake View Auto Sales at Mountain Home, according to the plea agreement. The total price of the vehicle was $ 34,900. Read got a cashier’s check for $ 26,000 and got credit for a trade-in vehicle.
This resulted in the charge of money laundering, according to the court record.
“Read has knowingly entered into a monetary transaction through, through and to a financial institution, affecting interstate commerce, in property of criminal origin valued in excess of $ 10,000, when he bought a 2017 GMC truck… using money that was the proceeds of a scheme to defraud the SBA by submitting a PPP loan application containing false and fraudulent information, ”according to the plea agreement.
Read committed wire fraud when he applied for unemployment aid in a pandemic in Arkansas, Missouri and Louisiana, according to the plea deal. He received a money transfer based on his false claim that he lived in West Monroe, La.
Read’s wife, Crystal Payne, 43, was sentenced Monday to five years probation, a $ 5,000 fine and $ 59,130 in restitution for her role.
She pleaded guilty in March to one count of making a false statement in violation of 18 USC § 1001 (a) (3).
According to Payne’s plea deal, also filed on March 17, she submitted an online application for a payment protection program loan to a Seattle bank, claiming she owned 100% of a company called ” B Bird Stitching “.
She claimed the company had a monthly payroll of $ 53,642.
When questioned on December 11, Payne told investigators that B Bird Stitching “hasn’t really made any money yet” and “hasn’t really started.”
According to the plea deal, Payne also forged an IRS Schedule C stating that B Bird Stitching had gross sales of $ 1.2 million in 2019 and net income of $ 643,700.
“This couple executed a ploy to steal money meant to help those who really needed it,” Acting US Attorney David Clay Fowlkes of the Western District of Arkansas said.
Fowlkes said he hoped the phrase “sends a clear message” to others considering similar fraud.
“Our agents will continue to prosecute bogus business owners such as Mr. Read aka ‘Snowbird Bob’ who chose to steal funds from small business owners crippled by this global pandemic,” said Christopher Artemis, Special Agent in charge of Internal Revenue. Internal Revenue Service Criminal Investigations Service.
“In a time of national turmoil and uncertainty, Mr. Read blatantly defrauded programs meant to help Americans and their businesses,” said James Dawson, FBI special agent in Little Rock.