Blake Patterson, CARES Act Fraud, Kentucky 2021

A federal grand jury in Louisville returned an indictment yesterday charging a local man with thirteen counts of fraud related to various CARES Act financial assistance programs.

Blake Patterson, 37, of Louisville, Kentucky, is accused of filing eleven fraudulent applications for various CARES Act financial assistance programs, including Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL), resulting in the theft of $133,802 and attempted theft of an additional $608,704.50.

Patterson organized the entities Propellente, Darke Rose, and Link LLC after the onset of the Covid 19 pandemic. He then exaggerated the gross revenues, number of employees, and payroll of those entities in the fraudulent applications he filed.

Patterson was granted one EIDL payment in the amount of $67,900 and one PPP loan in the amount of $65,902. He further submitted a fraudulent application seeking forgiveness of the PPP loan, which was ultimately granted.

The Small Business Administration (SBA) PPP loans were designed to provide a direct incentive for small businesses who were in operation on February 15, 2020, to keep their workers on the payroll. PPP loan proceeds were required to be used by the business on certain permissible expenses. Interest and principal on PPP loans could be entirely forgiven if the business spent the loan proceeds on the allowable expenses within a designated period of time and used a certain percentage of the PPP loan proceeds on payroll expenses.

Patterson is charged with twelve counts of wire fraud in violation of Title 18, United States Code, Section 1343 and one count of bank fraud in violation of Title 18 United States Code Section 1344.

The defendant made his initial court appearance today before a U.S. Magistrate Judge in the U.S. District Court for the Western District of Kentucky.

If convicted, Patterson faces a maximum penalty of 270 years in prison.

A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Michael A. Bennett of the Western District of Kentucky and Kelly K. Moening, Special Agent in Charge, Treasury Inspector General for Tax Administration, Great Lakes Field Division, made the announcement.