VALLEY SPRINGS, Calif. – Tracy Emery Smith, 42, of Valley Springs, has been sentenced to 37 months in prison and ordered to pay $901,035 in restitution for COVID-19 Paycheck Protection Program (PPP) loan fraud and money laundering, U.S. Attorney Phillip A. Talbert announced.
Smith submitted loan applications for three companies, containing false information such as the number of employees, average monthly payroll, and bankruptcy status. The applications claimed Smith had 27 employees with an average monthly payroll of $105,791 for one company, Sharp Holding. He certified he was not involved in a bankruptcy when, in fact, his bankruptcy was pending at the time of the application.
Smith received PPP loan proceeds of $220,600 for Sharp Holding. He also submitted similar false loan applications for Real Estate and Home Solutions and another company. The total amount of loan proceeds obtained through the scheme is unknown.
“Smith’s bogus loan applications drained the PPP program of funds intended for actual businesses that were negatively impacted by the pandemic,” said U.S. Attorney Talbert. “The U.S. Attorney’s Office will continue to investigate and prosecute those who obtained PPP funds through fraud.”
The FBI, IRS, and FDIC OIG investigated the case, which was prosecuted by the U.S. Attorney’s Office. The investigation found that Smith created ghost employees and falsified loan applications to obtain PPP loan proceeds earmarked to help struggling businesses during the COVID-19 pandemic.
Smith’s actions not only defrauded the PPP Loan Program but also disadvantaged business owners who were actually entitled to the benefits, said Special Agent in Charge Ryan L. Korner from the San Francisco Regional Office of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG).
Tracy Emery Smith, 42, of Valley Springs, was sentenced to 37 months in prison and ordered to pay $901,035 in restitution for COVID-19 Paycheck Protection Program (PPP) loan fraud and money laundering. He received PPP loan proceeds of $220,600 for one company, and the total amount of loan proceeds obtained through the scheme is unknown.
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Key Facts
- State: California
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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