COVID-19 Fraud Task Force uncovers $7 Million in fraudulent claims
BOISE, Idaho (KMVT/KSVT) — U.S. Attorney Josh Hurwit announced the results of the work of the District of Idaho’s COVID-19 Fraud Task Force that was formed last September. In the past 12 months, the Task Force has built a team consisting of federal prosecutors and 11 federal agencies focused on prosecuting cases related to pandemic-related programs including the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL), Unemployment Insurance (UI), and Coronavirus Food Assistance Program (CFAP).
The Task Force has now charged a dozen defendants criminally and obtained civil judgments against three defendants. The amount of fraud associated with the cases is over $7 million.
“Credit goes to the prosecutors and investigators who are sparing no effort to identify COVID fraud, to hold the perpetrators accountable, and to return stolen funds to the taxpayers,” said U.S. Attorney Hurwit. “While I am proud of the successes we have had so far, the Task Force is still in its early phases. We will not rest until we have done everything in our power to seek justice against those who took advantage of the COVID-19 pandemic to line their pockets through fraud.”
“OIG will leverage partnerships and collaborate across the law enforcement spectrum to bring fraudsters to justice,” said SBA OIG’s Western Region Special Agent in Charge Weston King. “These judicial outcomes demonstrate the consequences for these wrongful acts are significant. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
“The Treasury Inspector General for Tax Administration will continue to aggressively pursue those who misuse IRS online systems to further fraudulent schemes and those who fraudulently obtain relief from the Coronavirus Aid, Relief, and Economic Security Act and its Paycheck Protection Program,” said Special Agent in Charge Rod Ammari of the TIGTA Western Field Division. “We appreciate the efforts of our law enforcement partners and the United States Attorney’s Office to ensure this criminal activity is held to account.”
The following are cases recently prosecuted by the District of Idaho’s COVID Fraud Task Force:
Lawrence Sikutwa, 43, of Boise, was sentenced to 30 months followed by 5 years of supervised release on September 25, 2023, for bank fraud and money laundering. According to court documents, between April 2020 and February 2021, Sikutwa submitted three fraudulent PPP loan applications and, as a result, obtained approximately $347,000 in fraudulent loan proceeds. Sikutwa used the identities of two individuals known to him to submit two of the PPP loan applications. All three of the loan applications Sikutwa submitted contained false certifications about the dates the companies were opened, the number of employees and amount of payroll, and that the loan proceeds would be used for business related expenses. Sikutwa also submitted false and fraudulent documents with the loan applications in an effort to substantiate the information contained on the applications. After receiving the loan proceeds, Sikutwa caused more than $190,000 to be transferred offshore. Other proceeds were transferred to various individuals and appeared to be used for personal expenses.
Valentin Lapatskiy, 34, of Meridian, was sentenced to 15 months followed by 2 years of supervised release on September 26, 2023, for wire fraud. Lapatskiy fraudulently obtained $300,000 in EIDLs by making materially false and fraudulent representations to the SBA in applications for two businesses. Lapatskiy falsely claimed in an application that his purported company Valdi Homes INC opened in November 2017 and he became the owner in February 2018. He also made false representations about a purported limousine company in his wife’s name. In both applications, Lapatskiy falsely claimed gross revenues, cost of goods sold, and employees for 2019.
Anubor Bagbi, 63, of Las Vegas, Nevada, pleaded guilty to aggravated identity theft and bank fraud and is set for sentencing on December 7, 2023. While investigating Bagbi for opening fraudulent business accounts and trying to cash stolen and/or counterfeit business checks, it was discovered that he previously used some of the same accounts, business names, and identities to fraudulently apply for, obtain, and spend PPP and EIDL funds. Beginning in April 2020 and continuing, Bagbi caused losses of $664,828 in PPP and EIDL funds, by submitting false and fraudulent applications.
Craig Marlow, 40, of Blackfoot, Idaho, was indicted by a federal grand jury on September 13, 2023, on wire fraud charges for allegedly obtaining more than $900,000 in fraudulent EIDL program proceeds. According to allegations in the indictment, between May 2020 and July 2021, Marlow used identities of individuals known to him—primarily family members—to illegally obtain EIDLs disbursed by the SBA. He also submitted at least two fraudulent applications using his own identity. As alleged in the indictment, Marlow submitted the applications using shell entities and provided false statements in the applications, including false statements about the gross revenue, monthly revenue, cost of goods, cost of operations, and number of employees for the entities in whose names the applications were submitted. Marlow allegedly submitted, and caused to be submitted, ten fraudulent loan applications and obtained $926,700. An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Patricia Pischel, 38, of Star, Idaho, pleaded guilty to wire fraud and is set for sentencing on November 15, 2023. Pischel fraudulently obtained $219,409 in PPP and EIDL funds. Pischel made materially false and fraudulent misrepresentations about three businesses and, in reliance on those misstatements, she obtained approximately five PPP loans and EIDLs. Pischel’s misrepresentations included the number of employees, monthly payroll, and wage information included in purported IRS Forms W-3.
Nels Anderson, 58, of Holbrook, Idaho, was sentenced to 6 months followed by 3 years of supervised release for a false claim. Anderson was charged for submitting a CFAP 2 application that contained a materially false, fictitious, and fraudulent livestock claim. When asked for additional documentation, Anderson submitted fraudulent invoices. Anderson did not receive the CFAP 2, but the intended loss was $114,557.19.
Jimmy Winebrenner, 79, of Post Falls, Idaho, pleaded guilty to using or trafficking in unauthorized access devices, and is set for sentencing on November 14, 2023. Between May and August 2020, Winebrenner received at least 16 unemployment benefits cards in the mail from various state agencies in names other than his own. Between July and August 2020, Winebrenner obtained $81,180 in unemployment benefits from state agencies.
Daniel Labrum, 42, of South Jordan, Utah, pleaded guilty to bank fraud and is set for sentencing on November 16, 2023. Labrum’s scheme included submitting six PPP loan applications to financial institutions, one of which was based in Boise, on behalf of several businesses. The applications contained false information about the businesses concerning, among other things, the number of employees and their monthly payroll, certifications about the businesses and the intended use of the PPP funds. In total, the applications sought approximately $1,914,571 in PPP loans.
Eric O’Neil, 58, of Bethel, Connecticut, pleaded guilty to bank fraud and is set for sentencing on December 7, 2023. O’Neil submitted two PPP loan applications to financial institutions, one of which was based in Boise, on behalf of his company. The applications contained false information about his business concerning, among other things, the number of employees and its monthly payroll, certifications about the business and the intended use of the PPP funds. In total, the two applications sought approximately $777,501 in PPP loans.
U.S. Attorney Hurwit thanked the members of the COVID Fraud Task Force for their efforts. The federal law enforcement agencies participating are the Small Business Administration, Office of Inspector General, the U.S. Department of Treasury, Inspector General for Tax Administration, the U.S. Secret Service, the Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation, the U.S. Department of Agriculture, Office of Inspector General, the U.S. Postal Inspection Service, the Social Security Administration, Office of Inspector General, the Federal Deposit Insurance Corporation, the U.S. Department of Health and Human Services, Office of Inspector General, and the U.S. Department of Homeland Security Investigations, Office of Inspector General.
Assistant U.S. Attorneys Darci Crane, Brittney Campbell, and Sean Mazorol are prosecuting these cases with the assistance of the Criminal Division’s Fraud Section.
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