Donald Franklin Trosin, PPP Loan Fraud, Iowa 2022

A scheme to defraud the United States out of Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) funds has been exposed in Iowa, with a Minnesota man at the center of the scandal.

Donald Franklin Trosin, 56, from Champlin, Minnesota, formerly of Armstrong, Iowa, pleaded guilty to one count of major fraud against the United States and one count of money laundering conspiracy in federal court in Sioux City.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in late March 2020, provides emergency financial assistance, including PPP and EIDL loans, to Americans suffering the economic effects of the COVID-19 pandemic.

Trosin admitted participating in a scheme to defraud the United States out of PPP and EIDL loan funds after more than 20 applications were submitted to the Small Business Administration in his name and that of another person.

The applications falsely represented that Trosin had 120 employees on his payroll and over $5 million in payroll expenses, when in truth, he did not operate a business at all.

Trosin also admitted withdrawing and wiring proceeds from the scheme to other individuals in other states, after receiving the funds through banks in Minnesota and Northwest Iowa.

According to court documents, Trosin faces up to 20 years’ imprisonment, over $5,000,000 in fines, and three years of supervised release following any imprisonment.

Trosin is currently free on bond pending sentencing, which will be set after a presentence report is prepared.

The case is being prosecuted by Assistant United States Attorney Tim Vavricek and was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, the Small Business Administration-Office of Inspector General, and the Treasury Inspector General for Tax Administration.

Related Federal Cases