SACRAMENTO, Calif. – A Calaveras County man has been sentenced to 37 months in prison for his role in a COVID-19 Paycheck Protection Program (PPP) loan scam, the U.S. Department of Justice announced today.
Tracy Emery Smith, 42, of Valley Springs, was sentenced by U.S. District Judge John A. Mendez for PPP loan fraud and money laundering. Smith was ordered to pay $901,035 in restitution for the crimes.
According to court documents, Smith submitted loan applications for three companies containing false information, including the number of employees, average monthly payroll, and his involvement in bankruptcy. Smith was listed as the sole owner of two of the companies, Sharp Holding and Real Estate Solutions, and submitted loan applications claiming 27 employees with an average monthly payroll of $105,791 for Sharp Holding. He certified that he was not involved in a bankruptcy when, in fact, his bankruptcy was pending at the time of the application.
“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 Phillip A. Talbert. “The U.S. Attorney’s Office will continue to investigate and prosecute those who obtained PPP funds through fraud.”
The FBI, IRS, and Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG) investigated the case, which was prosecuted by Assistant U.S. Attorney Veronica A. Gaitan.
Tracy Emery Smith was sentenced to 37 months in prison and ordered to pay $901,035 in restitution for his role in the COVID-19 PPP loan scam. The case highlights the ongoing efforts of law enforcement to protect taxpayer-funded programs from those who seek to exploit them for personal gain.
Smith received PPP loan proceeds of $220,600 for Sharp Holding and $680,400 for Real Estate Solutions, a total of $901,035. The investigation found that Smith created ghost employees and falsified loan applications to obtain the funds, which were designated to provide financial relief to businesses impacted by the COVID-19 pandemic.
The U.S. Attorney’s Office praised the collaborative efforts of the FBI, IRS, FDIC OIG, and other law enforcement agencies in bringing the case to a successful conclusion. The case serves as a reminder that law enforcement will continue to investigate and prosecute those who seek to exploit taxpayer-funded programs for personal gain.
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Key Facts
- State: California
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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