Joshua Lybolt, COVID-19 Relief Program Fraud, Colorado 2022

A married couple from Castle Rock, Colorado, has been indicted for their alleged involvement in a $5 million COVID-19 relief program fraud scheme, according to a federal indictment unsealed in Denver.

Joshua Lybolt, 45, and Magdalena Lybolt, 46, were charged with wire fraud and money laundering, respectively, in connection with their alleged scheme to defraud the Small Business Administration’s COVID-19 Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP).

According to the indictment, Joshua Lybolt applied for and received $4,950,000 in EIDL funds and $41,667 in PPP funds between April 2020 and August 2022. The indictment alleges that Lybolt falsely certified in fraudulent loan applications that the business entities suffered losses as a result of the COVID-19 pandemic, despite knowing that the business entities were not in operation on the dates required to receive relief funds.

The indictment further alleges that Joshua Lybolt and Magdalena Lybolt falsely certified that all the loan proceeds would be used for business expenses when, in fact, they used the bulk of the proceeds for personal expenses, including a 2022 Porsche Taycan, a 2016 Land Rover Range Rover, memberships in a country club, a luxury vacation club, and real estate properties.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted in March 2020 and was designed to provide emergency financial assistance to Americans dealing with the economic impact of the COVID-19 pandemic.

The defendants made their initial appearance on July 11, 2024, in Denver in front of Magistrate Judge Scott T. Varholak. The charges contained in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.

The case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Theodore O’Brien and Craig Fansler.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the government in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.

The case is part of the nationwide effort led by the COVID-19 Fraud Strike Force, which combines law enforcement and prosecutorial resources to focus on large-scale, multistate pandemic relief fraud perpetrated by criminal organizations and transnational actors, as well as those who committed multiple instances of pandemic relief fraud.

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