Pewaukee man convicted of $1M PPP loan fraud scheme

(Associated Press)
Published: Feb. 23, 2021 at 2:42 PM CST
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MADISON, Wis. (WSAW) -A Pewaukee man has pleaded guilty to fraudulently obtaining more than $1 million in Paycheck Protection Program loans.

Thomas Smith is scheduled to be sentenced June 2 in federal court.

Investigators said Smith fraudulently sought over $1.2 million in PPP loans. According to his plea agreement, Smith made numerous false and misleading statements on loan applications. Investigators said the financial institution approved and funded over $1 million in loans. Smith then directed his co-conspirators to send him portions of the PPP funds within days of receiving them and used the proceeds for 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.

According to a news release, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $60 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds.

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