Congress passed the CARES Act in March 2020 as a response to the COVID-19 pandemic. Among other provisions, the CARES Act directed the U.S. Small Business Administration (SBA) to issue eligible businesses Economic Injury Disaster Loans (EIDL) to help them cover their payroll and other business obligations during the pandemic. This, in turn, has led to an increasing number of prosecutions of individuals suspected of defrauding the EIDL program to obtain loans for unauthorized purposes.
Appeals Court Finds Trial Judge’s Sentencing Was Not “Unreasonable”
CARES Act fraud is not a minor matter, at least as far as the federal government is concerned. Lying on a federal loan application is a serious crime. And that often carries serious jail time upon conviction.
For example, a federal appeals court recently upheld the conviction of a Georgia woman accused of misusing $150,000 in EIDL funds, who was subsequently sentenced to four years in federal prison. The appeals court expressly rejected the defendant’s argument that her sentence was “unreasonable” under federal law.
According to the evidence introduced at the defendant’s trial, the defendant “submitted several loan applications with false information, including a counterfeit Internal Revenue Services that listed a fraudulent tax identification number.” Using these loan applications, she obtained the aforementioned $150,000 in EIDL funds. Prosecutors said the defendant then kept the money on herself. Law enforcement later seized about $50,000 in unused funds from the defendant’s bank account but the other $100,000 was never recovered.
The United States Attorney’s office initially charged the defendant with four counts of wire fraud. Wire fraud basically refers to using any means of electronic communication across state lines to further a fraudulent scheme. For example, if you use your computer to file a loan application containing false information and send it to the lender via the Internet, that can be considered a type of mail fraud.
The defendant reached a plea agreement with the U.S. Attorney. She agreed to plead guilty to a single count of mail fraud and the government dropped the remaining counts. The prosecution also agreed to recommend a “downward departure” in the defendant’s sentence.
In the federal court system, judges must follow a complex set of guidelines that define various ranges of punishments based on a variety of factors. In this case, the initial report suggested a sentence of between 12 and 18 months. But the judge elected to impose a sentence of 24 months (or 4 years), prompting the defendant’s appeal.
But as the appeals court explained, the trial court acted within its reasonable discretion in imposing a higher sentence. The appellate court noted the judge could have sentenced the defendant to a maximum of 20 years in prison. And given the “reprehensibility of stealing funds from tax-payers during the coronavirus pandemic,” four years was not out of line.
Speak with a Tampa, Florida, White Collar Criminal Defense Attorney Today
While many people tend to think of white collar crimes like wire fraud as less serious than violent felonies, the reality is you can face some serious jail time for these offenses, especially when they involve allegations of defrauding the government itself. So if you are under investigation and need legal advice from a qualified Tampa CARES Act fraud defense lawyer, contact Trombley & Hanes today to schedule a consultation.