A Denver man is headed to federal prison after pleading guilty in a case involving $1.2 million in Paycheck Protection Program fraud committed during the pandemic. The announcement marks the latest chapter in a string of federal prosecutions targeting Coloradans accused of exploiting emergency relief funds meant to keep workers employed and small businesses solvent through COVID-19 shutdowns.
According to FBI Denver
, the case stems from the fraudulent pursuit of pandemic-era loans, and the agency credited a U.S. Attorney's Office for the District of Colorado news release tied to the sentencing. The case is among the federal prosecutions involving pandemic-loan fraud.
The case involved pandemic-era financial assistance programs. FBI Denver announced that the man is headed to federal prison after pleading guilty.
A Pattern of PPP Fraud Cases in Colorado
The Denver case is far from an isolated one in the state. Morrison resident Richard Nieto was sentenced to 46 months in federal prison and ordered to pay $962,438.85 in restitution after a PPP loan fraud case, according to the U.S. Attorney's Office for the District of Colorado. The Denver Gazette reported that Nieto was indicted on three counts of wire fraud and five counts of money laundering after he submitted three fraudulent PPP applications requesting more than $1.1 million and obtained roughly $913,000 across two loans.
Nieto's scheme reportedly went further than the initial applications. The outlet's report describes how he later submitted fraudulent forgiveness applications for both loans and created 87 fake payroll checks to support them.
How Big Is Colorado's Pandemic Fraud Problem?
The scale of pandemic relief fraud in Colorado has been difficult to pin down precisely, but the available numbers are striking. More than $15 billion in PPP money flowed into the state, and the program became a prime target for scammers, according to The Denver Post. A state audit cited in that same report found more than $73 million in unemployment claims paid between March 2020 and April 2021 were likely fraudulent.
If a national estimate suggesting fraudsters captured roughly 10 percent of PPP funds held true in Colorado, that would translate to about $1.5 billion stolen statewide, the Denver Post reported. Nationally, the Justice Department's Fraud Section has prosecuted more than 200 defendants in over 130 criminal cases tied to the CARES Act and has seized more than $78 million in cash proceeds derived from fraudulently obtained PPP funds, according to the U.S. Small Business Administration.
Other Pandemic Fraud Prosecutions Nationwide
Colorado's federal prosecutors have also pursued cases beyond the state's borders. A Florida woman was sentenced to 19 months in prison for submitting fraudulent Economic Injury Disaster Loan and PPP applications and was ordered to pay $916,656.03 in restitution, according to the U.S. Attorney's Office for the District of Colorado.
As for the Denver man at the center of this latest case, the details of his sentence, restitution, and specific charges have not been made available beyond FBI Denver's announcement that he is headed to federal prison following his guilty plea. The case adds to a growing list of pandemic-era fraud prosecutions that federal authorities say they intend to keep pursuing.
