(WWJ) A Michigan man who concocted and executed a plan to steal funds that were meant to help struggling business during the COVID-19 has pleaded guilty to bank fraud and money laundering charges.
U.S. Attorney Mark Totten Thursday announced the update in the case of 50-year-old Kurtis James VanderMolen of Grand Rapids, who obtained around $170,000 in Paycheck Protection Program loans for a company that didn't even exist.
In July 2020, investigator say VanderMolen submitted a PPP loan application to a New Jersey bank for the fake company "Breakout Strategies Corporation." VanderMolen claimed that Breakout Strategies had 11 employees, and he sent the bank fraudulent bank and fake payroll records to make it look like it was a real business.
VanderMolen got $100,641 in his first PPP loan, which he used for personal expenses, including a BMW 650i convertible, Totten said.
In February 2021, when VanderMolen applied for a second PPP loan on behalf of Breakout Strategies and again submitted fraudulent records. This time he obtained a PPP loan for $69,361 which he again used for personal expenses, including to pay for his wedding aboard a boat in Florida.
Bank fraud carries a maximum penalty of 30 years in prison, and money laundering carries a maximum of 10 years.
“This was federal aid that was intended to support our country’s critical small businesses, not to buy luxury cars or pay for wedding expenses,” said Totten, in a statement. “My office will continue to aggressively prosecute COVID-19 relief fraud using all available remedies.”
“The Paycheck Protection Program was a critical lifeline for Michigan’s small businesses, and the FBI will not tolerate people taking advantage of that program to enrich themselves,” added James A. Tarasca, Special Agent in Charge of the FBI in Michigan. “This kind of fraud may
have prevented honest business owners from getting the help they needed to weather the early days of the pandemic. The FBI remains committed to finding people who commit fraud and holding them accountable for their crimes.”
This case was investigated by the FBI and the U.S. Attorney’s Office for the Western District of Michigan. Assistant U.S. Attorney Adam Townshend is prosecuting the case.
Anyone with information about attempted frauds involving COVID-19 relief can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline (1-866-720-5721) or through the Center’s Web Complaint Form.
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