(WFRV) – A Wisconsin man fraudulently obtained over $1 million in Paycheck Protection Program (PPP) loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
According to authorities, 46-year-old Thomas Smith from Pewaukee pleaded guilty to one count of bank fraud and will be sentenced on June 2.
As a part of his plea, Smith admitted that he sought over $1.2 million in PPP loans through applications on behalf of eight different companies. Smith had multiple loan applications to be submitted that had false and misleading statements about the companies’ payroll expenses. Smith directed his co-conspirators to send him portions of the PPP funds after the companies received them.
Smith admitted that he used the proceeds for his own personal expenses.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses for payroll costs, interest on mortgages, rent, and utilities.
Acting U.S. Attorney Richard G. Frohling of the Eastern District of Wisconsin was part of the group that made the announcement.
Frohling recently took over for Matthew Krueger, after Krueger announced his resignation.