TULSA, Oklahoma (AP) – According to US Attorney Clint Johnson, a Tulsa couple who illegally filed for $2.7 million in Paycheck Protection Program (PPP) Loans pled guilty in federal court.
Under the CARES Act, the Small Business Administration (SBA) guarantees PPP loans.
Michelle Cadman-Sullivan, 42, and William Mark Sullivan, 49, pled guilty to Conspiracy to Commit Bank Fraud. According to the plea deals, the defendants must pay Arvest Bank $114,281.58 in restitution and Exchange Bank $628,645.00 in restitution, for a total of $742,926.58. According to court papers, this amount reflects the revenues collected unlawfully by the couple.
At the couple’s sentencing hearings, a federal court will establish the proper punishments and restitution amounts. The court will set the dates for these sessions.
“The Sullivans falsely requested for and received many Paycheck Protection Program loans,” Johnson said. “The $743,000 was earmarked for actual small business owners battling to serve our neighborhood.”
The Sullivans revealed in their plea deals that they plotted to submit fraudulent statements and reports to Arvest Bank and Exchange Bank when they sought various PPP loans totaling roughly $2.7 million between April 8, 2020, and May 11, 2020. In six PPP loan applications, the couple filed phony W2s, Form 941s, and 2019 IRS Schedule Cs (Form 1040).
In their plea pleas, they also admitted that they deliberately certified that all of the information in the applications and accompanying papers was truthful and proper when they knew it was not. The pair acknowledged moving the $742,926.58 in monies to several bank accounts and spending the money for personal needs.
Mr. Sullivan claimed on applications that “Oklahoma Paving” had an average monthly payroll of $50,546.41 on April 8, 2020, and “USA-1 Construction” had an average monthly payroll of $143,483.00 on April 30, 2020, according to his plea bargain.
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On their PPP loan applications, Mrs. Sullivan also claimed that on April 28, 2020, “U.S. Central Construction” had an average monthly salary of $26,053.00. She also revealed that on May 4, 2020, “Oklahoma Energy” had an average monthly payroll of $279,101.66. She also stated that on May 11, 2020, “Oklahoma Energy” had an average monthly payroll of $251,458.00.
According to the indictment, the couple lied about the number of businesses they owned and operated, the addresses and locations of the borrowing companies, the time the borrowing companies had purportedly been in operation, the number of employees, their names and addresses, the monthly payroll amount, wage figures, payroll taxes, and representations about how the PPP funds would be allocated.
The pair made several applications to both banks for the identical borrowing firms without mentioning that they were doing so.
“Those who defraud the federal government of pandemic relief funds will be aggressively pursued and held accountable,” said Cory Nootnagel, Acting Special Agent in Charge, Western Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and Bureau of Consumer Financial Protection.
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The inquiry was carried out by the SBA Office of Inspector General, the Board of Governors of the Federal Reserve System, the Office of Inspector General of the Bureau of Consumer Financial Protection; the US Department of Treasury Inspector General for Tax Administration; and the FBI. The case is being prosecuted by Assistant US Attorneys Cymetra M. Williams and Matthew Feeley.
