Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, has announced the indictment of three individuals for fraud related to COVID-19 relief funding by a federal grand jury. This indictment is the latest development from the Eastern Washington COVID-19 Strike Force, which has successfully pursued criminal charges against multiple individuals and recovered millions in fraudulently obtained COVID relief funding. 

On March 27, 2020, the CARES Act was enacted to provide relief funding for eligible small businesses facing economic impacts from the pandemic. Notably, the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program were established to offer government-backed funding to businesses, with PPP funds forgivable if used for payroll and eligible expenses. The indictment accuses Kelly Jo Driver, David Kurt Schneider, and Leif Gerald Larsen of conspiring to commit wire fraud, bank fraud, and submitting false claims. Schneider faces an additional charge of money laundering. Allegedly, the trio fraudulently acquired over $250,000 in CARES Act funding and sought an additional $1,000,000 through fraudulent applications. The indictment claims false information was submitted to the Small Business Administration (SBA) and PPP lenders, including fabricated revenue, employee numbers, and payroll expenses. The funding applications were filed under various business names, and Kelly Jo Driver is accused of creating fraudulent payroll and tax forms, receiving 10% of the disbursed funds for her involvement. 

Multi-Agency Collaboration: 

U.S. Attorney Waldref expressed concern for struggling small businesses unable to secure critical funding due to the overwhelming demand, leading to the creation of the Eastern Washington COVID-19 Fraud Strike Force. Launched in February 2022, the Strike Force collaborates with federal law enforcement agencies to investigate and prosecute fraud against COVID-19 relief programs. The multi-agency Strike Force includes representatives from the USAO, SBA Office of Inspector General, FBI, TIGTA, U.S. Secret Service, Homeland Security Investigations, Department of Veterans Affairs OIG, General Services Administration OIG, DHS OIG, Internal Revenue Service, Department of Energy OIG, and others. 

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Legal Consequences: 

The fraud charges carry potential sentences of up to 30 years in federal prison, along with restitution for fraudulently obtained funds. The case was investigated by the Eastern District of Washington COVID-19 Fraud Strike Force, FBI, and SBA OIG, and is being prosecuted by Assistant United States Attorneys Jeremy J. Kelley and Frieda K. Zimmerman. 

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