A Nevada man has been handed a prison sentence for defrauding over half a million dollars meant for businesses struggling amid the COVID-19 pandemic.
Brandon Casutt, 52, of Henderson, Nevada, was sentenced to 28 months in prison for his fraudulent acquisition of more than $500,000 through the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. These funds, guaranteed by the Small Business Administration (SBA) under the CARES Act, were established to provide relief to businesses hard hit by the pandemic.
Casutt submitted multiple fraudulent applications to the SBA and four SBA lenders on behalf of two companies he oversaw, seeking a whopping $5.7 million. Out of his bogus claims, two applications were successful: a $350,000 PPP loan for a business named Sky DeSign and a $150,000 EIDL loan for a charity named Skyler’s CF Foundation. Despite the applications falsely declaring significant payroll costs and numerous employees, both organizations had zero workers and had paid no wages.
After acquiring the funds, Casutt executed a money-laundering operation, generating fake payroll checks, totaling around $8,330 each, directed to himself and those close to him. These checks were labeled as “pandemic pay” or “back pay.” After encashing these checks, the money was then rerouted to Casutt’s bank account. Ultimately, the fraudulently obtained funds were used to buy a house in Henderson.
This case stands as a warning for many small business owners navigating the complexities of financial relief during the pandemic. Misusing these critical funds, intended to aid businesses during these trying times, can lead to severe legal repercussions. Furthermore, such fraudulent activities could potentially undermine the overall aim of these relief programs, putting genuine businesses in jeopardy.
In light of increasing concerns about fraudulent activities related to pandemic relief, the Attorney General founded the COVID-19 Fraud Enforcement Task Force in May 2021. This body was created to amplify efforts to identify, investigate, and prosecute those committing pandemic-related fraud.
This case underscores the importance of maintaining strict financial protocols for small businesses, especially when utilizing government relief funds. Furthermore, business owners should stay updated on the criteria and guidelines related to relief programs to ensure compliance.
Given the uptick in fraudulent cases since the CARES Act’s inception, businesses need to be vigilant. The Fraud Section alone has prosecuted over 200 individuals, resulting in the seizure of over $78 million in cash proceeds derived from the fraudulently acquired PPP funds.
Already grappling with numerous challenges in these unprecedented times, small businesses must remember that transparency and integrity in financial operations are crucial. Not only can these values protect a business from legal trouble, but they also ensure that relief funds can reach the businesses that need them the most.
To report any suspicions of fraudulent activities involving COVID-19 relief, individuals can visit the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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This article, "Nevada Business Owner Sentenced to 28 Months Over PPP Fraud" was first published on Small Business Trends