Two men were arrested on federal charges after allegedly converting to their personal use more than $2.2 million in loans that were meant to be given to ailing small businesses due to the pandemic-induced crisis.
The FBI arrested two men on federal charges after allegedly converting to their personal use more than $2.2 million in loans that were meant to be given to small businesses that have been suffering due to pandemic-induced crisis, the Attorney’s Office in Oregon said in a statement.
U.S. Attorney Billy Williams said Andrew Aaron Lloyd, 50, and Russell A. Schort, 38, have been charged with wire fraud, bank fraud and money-laundering through a criminal complaint filed against them.
According to the federal prosecutors, the two men took advantage of the economic relief programs, including the Economic Injury Disaster Loans and the Paycheck Protection Program.
These programs were handled by the Small Business Administration as authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
In the complaint, the FBI authorities started probing Lloyd and Schort after detecting “suspicious financial transactions indicating that the pair may have fraudulently obtained PPP loans.”
Bank records revealed that the two were able two receive at least three loan payments using three different entities, obtaining more than $2.2 million.
“After receiving the funds, Lloyd transferred at least $1.8 million to a personal online brokerage account and purchased various securities,” according to the complaint. “In the months that followed, these investments substantially increased in value.”
“On the date of the seizure, the securities purchased with the fraud proceeds and with a loan secured by equities purchased with fraud proceeds, were valued at over $10 million,” it continued.
FBI authorities arrested Schort on Wednesday. He was able to make his initial appearance in the federal court on the same day.
Lloyd was arrested on Thursday and was scheduled to appear before a U.S. Magistrate Judge in Eugene on Friday.