BALTIMORE, MD – Alexander Barabash, 52, of Baltimore, Maryland, is headed to federal prison after being sentenced to 14 months for a brazen scheme to siphon over $1.2 million in COVID-19 relief funds. The U.S. District Court, under Chief Judge James K. Bredar, also slapped Barabash with six months of home detention following his prison term, and three years of supervised release. The sentence comes after Barabash admitted to submitting bogus applications for Paycheck Protection Program (PPP) loans, a lifeline intended for struggling businesses during the pandemic.
The scheme centered around Barabash’s construction company, iDesignBuild LLC. Between April 2020 and January 2021, he filed *three* separate fraudulent applications, each building on the lies of the last. The first application claimed four employees and a $18,750 monthly payroll, netting him $46,800. But iDesignBuild had *no* employees, relying solely on independent contractors. Barabash didn’t stop there. He doubled down, submitting a second application claiming seven employees and a $38,777.60 payroll, backing it up with completely fabricated IRS forms that had never been filed with the IRS.
But the real audacity came with the third application, submitted in January 2021. Barabash claimed a staggering 37 employees and a monthly payroll of $525,227 – more than six times the number of employees and nearly $1.5 million more in wages than he’d previously reported. Again, the supporting IRS forms were pure fiction, signed by Barabash and his tax preparer, with no basis in reality. This time, the scheme worked spectacularly. A bank funded a $1,295,000 PPP loan, deposited into iDesignBuild’s account on February 26, 2021.
The money wasn’t used to keep iDesignBuild afloat or pay workers. Instead, Barabash used the fraudulently obtained funds to purchase two properties in Sparks Glencoe, Maryland. Federal investigators quickly caught onto the scheme, leading to a money judgment of $1,295,000 and a restitution order of $1,317,352.05. Barabash will also be forced to forfeit $504,869.54 seized from the iDesignBuild business account and his ownership stake in the Sparks Glencoe properties. A $400,000 fine was also levied.
The sentencing was announced jointly by U.S. Attorney for the District of Maryland Erek L. Barron, Acting Special Agent in Charge Kareem A. Carter of IRS-Criminal Investigation, and Special Agent in Charge Ross Luciano of the U.S. Secret Service – Baltimore Field Office. The Secret Service, along with the IRS, played a key role in unraveling the complex web of lies and tracing the stolen funds. The CARES Act was designed to help legitimate businesses weather the economic storm of the pandemic, not to line the pockets of fraudsters like Alexander Barabash.
This case serves as a stark reminder that those who attempt to exploit federal assistance programs will be held accountable. The U.S. Attorney’s Office continues to aggressively pursue PPP fraud cases, ensuring that those who stole from the system face the full weight of the law. While 14 months is a start, many question if the sentence truly reflects the scale of the deception and the amount of money stolen from those who genuinely needed it.
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Key Facts
- Agency: U.S. Secret Service
- Category: Fraud & Financial Crimes
- Source: Official Press Release
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