ST. LOUIS – St. Louis lawyer John J. Diehl Jr., 60, faced the music this week as he pleaded guilty to swindling the U.S. Small Business Administration out of $379,900 in COVID-19 pandemic relief funds.
In a stunning revelation, Diehl confessed to fraudulently obtaining an Economic Injury Disaster Loan (EIDL) for his law firm, the Diehl Law Group, on March 30, 2020. The EIDL program was intended to assist struggling small businesses during the pandemic, offering low-interest loans for working capital and other business expenses.
Diehl’s deceitful tactics didn’t stop there. He falsely certified that he would use the loan proceeds solely for alleviating economic injury caused by the January 31, 2020 disaster. But on April 27, 2020, less than a month later, Diehl made a $1,320.15 payment to a country club using EIDL funds, an inappropriate move.
He didn’t slow down either. By June 9, 2020, the remainder of the loan, $93,900, had been transferred into his firm’s account. For over a year, from June 10, 2020, to August 16, 2021, Diehl used these funds for unauthorized personal use, including payments for luxury cars, personal credit cards, and even college tuition for a family member.
Diehl didn’t stop at the first fraudulent loan. In March 2022, he requested a modification, again vowing to use the funds for disaster relief. But once again, he misused $285,000 of the modified loan proceeds between April 14, 2022, and June 21, 2023.
Diehl’s scheme caught up with him in March of this year when he requested another modification. Sentencing is set for December 19, where he could face up to 20 years in prison, a $250,000 fine, or both. His lawyer confirmed that Diehl has repaid the funds to the U.S. Treasury.
The FBI’s investigation and Assistant U.S. Attorney Hal Goldsmith’s prosecution of this case highlight the severity of pandemic fraud and its impact on American businesses and taxpayers.
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Key Facts
- State: Missouri
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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