Patrick Strauss, PPP Loan Fraud, District of Columbia 2024

Washington DC – In a stunning blow to small business owners, Patrick Strauss, 54, of Washington D.C., was sentenced to 48 months of probation, including six months of home confinement and 26 weekends in jail, for participating in a conspiracy to defraud the Paycheck Protection Program (PPP). Strauss was ordered to pay restitution in the amount of $304,900 and fined $8,784.

According to court documents, Strauss, owner of Powergrid Real Estate LLC, was approached by an individual who asked him to file an application for a PPP loan in 2020. Despite knowing that Powergrid did not qualify for the loan due to having no employees and no payroll, Strauss submitted a false application claiming the company had 16 employees and an average monthly payroll of $132,547.17. A co-conspirator prepared phony federal tax forms and payroll records to support the application.

Strauss submitted the application to Capital Bank in July 2020, and the bank wired $304,900 into Powergrid’s bank account. In July 2021, a co-conspirator prepared false and fraudulent federal tax returns, which Strauss submitted to Capital Bank in support of loan forgiveness for Powergrid.

The CARES Act, a federal law enacted on March 29, 2020, provided emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. The PPP, authorized under the CARES Act, allowed qualifying small businesses to receive forgivable loans for job retention and certain other expenses.

The case was investigated jointly by the U.S. Attorney’s Office for the District of Columbia, the FBI’s Washington Field Office, and the Internal Revenue Service – Criminal Investigation (IRS-CI) Washington, D.C., Field Office. U.S. Attorney Edward R. Martin Jr. commended the work of those who investigated the case.

Strauss pleaded guilty on September 12, 2024, to one count of conspiracy to commit bank fraud. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Related Federal Cases