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St. Paul Man Charged with COVID-19 Relief Fraud, Money Laundering after Obtaining $841,000 in Federal Loans

coronavirus_38-300x168The U.S. Attorney’s Office for the District of Minnesota announced charges against a St. Paul man accused of fraudulently obtaining approximately $841,000 from the federal Paycheck Protection Program (PPP) for a business that doesn’t exist.

Kyle William Brenizer, 32, was charged with two counts of wire fraud and two counts of money laundering. It is unclear if he has acquired legal representation.

According to the indictment, the defendant was the owner of a construction company based in Brooklyn Park called True-Cut Construction, LLC. In August 2018, the company was reportedly ordered to cease and desist operations by the Minnesota Department of Labor and Industry, and in December 2019, the company’s contractor license expired. He allegedly submitted a fraudulent PPP loan application for True-Cut Construction even though the company had folded. He reportedly sought more than $840,000 in federal funding, but the application was denied.

In May 2020, he again submitted another loan application, once more seeking $841,000 in funds. This time, he used the name of another individual and allegedly claimed the company’s average monthly payroll was over $330,000 for around 30 employees. He allegedly supplied falsified bank statements and IRS documents to support the claim. He also reportedly falsely certified that he was not subject to any criminal charges in the past five years even though he has multiple felony charges pending in Minnesota, including identity theft, check fraud, and theft by swindle. With these omissions and misrepresentations, his second application was approved and he reportedly received $841,000 in PPP funds, the indictment claims.

PPP loans were authorized by Congress under the Coronavirus Aid, Relief, and Economic Security (CARES) Act which was passed in March 2020. The CARES Act is meant to provide emergency financial assistance to American businesses that are struggling with the economic effects of the COVID-19 pandemic. Congress authorized over $500 billion in forgivable loans for small businesses to use for payroll expenses, rent and utilities, and interest on mortgages.

Instead of using the money for permissible business-related expenses, the defendant allegedly transferred an estimated $650,000 to a bank account unrelated to True-Cut Construction. He purportedly used $29,000 to buy a Harley-Davidson motorcycle and spent more than $1,000 on golf expenses and other personal entertainment and retail expenditures.

The charges against him are the result of an investigation by the Internal Revenue Service (IRS), the FBI, the Small Business Administration, and the Federal Deposit Insurance Corporation. The defendant had an initial court appearance on August 21 and will remain in custody until his arraignment on August 26, sources indicate.

Fraud is a serious offense with severe penalties. Anyone suspected of committing fraud related to federal COVID-19 relief programs should immediately consult an experienced fraud defense attorney. A good attorney can examine the evidence, conduct an independent investigation, and determine the best course of action to minimize the possible penalties.

South Florida Fraud Defense Attorney

Are you accused of committing fraud in South Florida involving federal COVID-19 relief programs? Contact Brian Silber, P.A. to set up a free initial consultation with one of South Florida’s most experienced fraud defense attorneys.

Source: 8.21.20 Minnesota man charged with covid-relief fraud and money laundering.pdf

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