U.S. Attorney Josh Hurwit Announces Launch of Idaho COVID-19 Fraud Task Force | USAO ID

BOISE — U.S. Attorney Josh Hurwit announces the formation of the District of Idaho’s COVID-19 Fraud Task Force and highlights the District of Idaho’s ongoing efforts to combat fraud related to the pandemic. These efforts have included complementary actions by the criminal, civil, and asset recovery divisions, as well as federal, state, and local law enforcement agencies.

“The task force represents a continuation of my office’s commitment to combating pandemic-related fraud,” U.S. Attorney Hurwit said. “It brings together a broad group of law enforcement agencies with prosecutors who will work together to hold accountable criminals who have unjustly enriched themselves at the expense of taxpayers by defrauding economic assistance programs.”

The U.S. Attorney’s Office is pleased to announce that the following agencies are part of the task force:

  • US Small Business Administration, Office of Inspector General
  • Tax Service, Criminal Investigation
  • United States Department of Treasury, Inspector General of Tax Administration
  • Federal Bureau of Investigation
  • Federal Deposit Insurance Corporation, Office of Inspector General
  • Social Security Administration, Office of the Inspector General
  • United States Department of Agriculture, Office of Inspector General
  • US Department of Health and Human Services, Office of Inspector General
  • United States Postal Inspection Service
  • U.S. Secret Service, Boise Resident Agency and Spokane Resident Office

“Those who commit fraud against SBA programs will be brought to justice and held accountable,” said SBA OIG Western Region Special Agent in Charge Weston King. “OIG remains committed to weeding out bad actors and protecting the integrity of SBA programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to ensuring that justice is served.

“The investigation of allegations of COVID-19 relief fraud remains a top priority for the IRS criminal investigation,” said Andy Tsui, IRS Criminal Investigation Special Agent, Field Office from Denver. “The IRS-CI has investigated more than 800 cases of fraud related to COVID-19 and we will continue to hold accountable those who steal funds intended to help American workers, families and small businesses.”

“Treasury Inspector General for Tax Administration has joined the U.S. Attorney’s Office for the District of Idaho to identify and investigate fraud, waste, and abuse of government assistance programs related to COVID-19 “said Treasury Inspector General for Tax Administration, J. Russell George. “We are committed to working with our law enforcement partners to aggressively investigate those who attempt to subvert these programs through the misuse of IRS systems and fraudulent IRS documents as part of their schemes. “

The task force will identify, investigate and prosecute those who have defrauded economic relief programs intended to help individuals and small businesses adversely affected by the COVID-19 pandemic. This includes programs such as the Paycheck Protection Program (PPP), Economic Disaster Loans (EIDL), Coronavirus Farm Assistance Program (CFAP), Rental Assistance Program (ERAP) and Unemployment Insurance (UI). To fraudulently obtain these funds, criminals set up businesses, committed identity theft, and inflated the size and scope of real businesses.

Case examples

Along with today’s announcement, U.S. Attorney Hurwit also announced that Nicholas Jones, 36, of Boise, was sentenced today to 30 months in federal prison for wire fraud and filing fundraising statements. campaign tampering related to his 2020 U.S. House of Representatives bid. Jones was also fined $100,000, and the U.S. Attorney’s Office has already received a separate restitution payment of more than $90. $000 from Jones.

Jones, a small business owner, applied for and received COVID-19 relief funds, including PPP and EIDL funds, totaling $753,600. Although he certified that these funds would only be used for business-related expenses, Jones used a significant portion of the funds for personal expenses, including car payments, life insurance policies and his mortgage. He also purchased a significant amount of stocks and investments with the relief funds.

Additionally, Jones ran as a candidate for the United States House of Representatives in 2020. He used some of the COVID-19 relief funds he received for campaign purposes. In addition to paying for political advertising, he used PPP funds to pay his restaurant workers not for the restaurant, but for campaigning for Congress, including making phone calls and hanging campaign flyers.

In imposing his sentence, U.S. Chief District Judge David C. Nye said Jones must bear the consequences of his conduct, which included the misuse of “money that was important and not was no longer available for its intended use”.

Other examples of cases the COVID-19 Fraud Task Force has investigated that have led to charges include:

  • Douglas Wold, 50, of Meridian, was sentenced to 41 months in federal prison for wire fraud, mail fraud and money laundering in December 2021. During the early months of the pandemic, Wold committed wire fraud by submitting fraudulent pay requests to his employer. . He also committed mail fraud as part of a COVID-19 testing program by issuing fraudulent invoices to his employer Fry Foods on behalf of his company, Hala Lallo Health, when in fact the test was provided. by another entity and at a much lower cost. Wold deposited the funds he received in a bank account he controlled and did not pay the healthcare provider who actually performed the tests. Wold committed money laundering by transferring $69,116.48 of the proceeds of his frauds for the purchase of a speedboat and trailer, which the government has since recovered.
  • Jeff C. Vogt of Caldwell fraudulently obtained $250,000 in CFAP funds based on his false claim that he produced 22,480,000 pounds of dry onions which were shipped but not sold between January 15, 2020 and on April 15, 2020. A civil complaint has been filed against Vogt alleging violations of the False Claims Act and common law fraud. Vogt having failed to respond, a default judgment of $761,665 was entered against him.
  • Lawrence Sikutwa, 43, of Boise, was charged with bank fraud, aggravated impersonation and money laundering in an indictment filed in October 2022. The charges stem from a scheme to defraud two banks by obtaining $337,976 in PPP loans, then allegedly using the loan proceeds for personal and other non-business expenses. According to court documents, the loan applications were fraudulent because, among other things, they contained false declarations and certifications concerning the companies’ average monthly payroll, the number of employees and the intended use of the funds for expenses related to the company, in particular payroll.
  • Khadijah Chapman, 58, of Atlanta, Georgia; Daniel Labrum, 41, of South Jordan, Utah; and Eric O’Neil, 57, of Bethel, Connecticut, were charged in three separate indictments filed in July 2022 with bank fraud for fraudulently obtaining PPP loans from a Boise-based financial institution. According to court documents, the defendants, along with others, allegedly falsified information and submitted fraudulent documents to collectively obtain more than $2.4 million in SBA-backed relief funding for small businesses battling the coronavirus crisis. economic impact of COVID-19.

Citizens and others who suspect fraud or other pandemic-related criminal acts should report it to the COVID-19 Pandemic Fraud Hotline at www.pandemicoversight.gov/contact/about-hotline. Idaho residents are also encouraged to report COVID-19 fraud directly to the U.S. Attorney’s Office at (208) 334-1211.

An indictment is only an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in court.

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