Wisconsin man who sought more than $600k in PPP loans pleads guilty to bank fraud

A Wisconsin man pleaded guilty to bank fraud this week for his role in fraudulently obtaining more than $600,000 in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, according to a release issued Wednesday by the federal bank deposit insurer’s inspector general.

Court documents show that Stephen Smith, 42, of Milwaukee, admitted Monday that he fraudulently sought more than $600,000 in PPP loans through applications to an insured financial institution on behalf of three different companies, the Federal Deposit Insurance Corp. (FDIC) Office of Inspector General (OIG) said. Smith, according to his plea agreement, caused fraudulent loan applications to be submitted that made numerous false and misleading statements about the companies’ respective payroll expenses. He 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, it said.

Smith is scheduled to be sentenced July 14 and faces a maximum penalty of 30 years in prison.

The release states that the SBA-OIG, FBI, FDIC-OIG, and IRS-CI are investigating the case.

Wisconsin Man Pleads Guilty to COVID-Relief Fraud