Randall Blankenship, Wire Fraud, Kentucky 2020

A Versailles, Ky., man, Randall ‘Rocky’ Blankenship, Jr., 49, pleaded guilty on Thursday, before U.S. District Judge Karen C. Caldwell, to a conspiracy to commit wire fraud to obtain Paycheck Protection Program loans under false pretenses.

According to his plea agreement, in April 2020, Blankenship submitted four fraudulent applications for Paycheck Protection Program (PPP) loans for Blankenship RV Finance Solutions LLC, RSGG Properties LLC, RSGG Holdings LLC, and RSGG Investments LLC, all business entities he formed.

The Paycheck Protection Program was created as part of the CARES Act, a law passed in March 2020 in response to the COVID-19 pandemic. Paycheck Protection Program loans were designed to provide an incentive for small businesses to keep workers on their payroll during the pandemic; these loans would be forgiven by the United States Small Business Administration, if the borrower established that loan proceeds were used for payroll, rent, or other approved business expenses.

As part of his fraudulent PPP loan applications, Blankenship, with the assistance of a certified public accountant, created fake tax documents and payroll records indicating that his businesses had hundreds of thousands of dollars in quarterly payroll; when in fact, none of the entities had any payroll expense at all.

Blankenship submitted the applications through Kentucky Bank and Independence Bank; and as a result, he obtained fraudulent PPP loans totaling $1,323,829.

According to his plea, he used some of the funds for a RV business he owned (which had already received its own PPP loan and was ineligible for additional loans at the time), as well as personal use, including paying off casino debt and purchasing real estate.

Blankenship is scheduled to be sentenced on March 17, 2022. Blankenship agreed to pay restitution of $1,323,829. He faces a maximum of twenty years in prison, a fine of not more than $250,000, and supervised release of not more than three years.

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

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