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Man Admits Pandemic Loan Fraud, Faces Up to 20 Years in Prison
ST. LOUIS – In a devastating reminder of the dangers of pandemic-era loan scams, Robert Baines, 44, of St. Louis, has admitted to committing two felony counts of wire fraud.
Baines pleaded guilty in U.S. District Court in St. Louis to the charges, which stem from his fraudulently obtaining $41,484 in loans intended to help struggling businesses during the pandemic.
According to court documents, Baines applied for a first draw Paycheck Protection Program (PPP) loan on March 31, 2021, and a second draw PPP loan on April 9, 2021. In the loan applications, Baines falsely claimed that he was self-employed and had earned gross income of $99,563 in 2019.
Baines submitted a forged IRS form with his applications to bolster his claims. However, it was later discovered that Baines was not self-employed and did not earn any of the claimed self-employment income. In his application for the second-draw loan, Baines falsely claimed that he’d suffered at least a 25% reduction in gross income between 2019 and 2020.
The PPP loans were designed to help small businesses during the COVID-19 pandemic and were to be used for business-related purposes, such as to cover payroll, utilities, and rent or mortgage payments. Instead, Baines used the money for restaurants, travel, clothing, and other retail items.
Baines is scheduled to be sentenced on November 12. Wire fraud is punishable by up to 20 years in prison, a fine of up to $250,000, or both prison and a fine. The U.S. Secret Service investigated the case, and Assistant U.S. Attorney Justin Ladendorf is prosecuting the case. Baines has agreed to pay full restitution for the fraudulently obtained loans.
Key Facts
- State: Missouri
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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