January 8, 2021 10:50 a.m.
A Myrtle Creek resident is one of two Oregon men facing federal charges for fraudulently converting loans intended to help small businesses during the COVID-19 pandemic, to their personal use.
U.S. Attorney Billy J. Williams said 38-year old Russell Schort and 50-year old Andrew Lloyd of Lebanon, have been charged in a criminal complaint with wire fraud, bank fraud and money laundering.
A release from the U.S. Attorney’s Office – District of Oregon, said the men are accused of taking advantage of economic relief programs administered by the Small Business Administration, including Economic Injury Disaster Loans and the Paycheck Protection Program, as authorized by the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act. That legislation was designed to provide emergency financial assistance to millions of Americans and small businesses suffering the economic effects of the COVID-19 pandemic.
Williams said according to the complaint, the Federal Bureau of Investigation began investigating the men after discovering suspicious financial transactions indicating the pair may have fraudulently obtained PPP loans. A review of bank records revealed that between April 7th and May 8th of last year, the men applied for and received three PPP loan payments using three separate entities, totaling more than $2.2 million. Williams said the loan application packages included some of the same information across the different business entities, including businesses physical locations and the names of several dozen employees.
The release said after receiving the funds, Lloyd transferred at least $1.8 million to a personal online brokerage account and purchased various securities. In the months that followed, these investments substantially increased in value. On the date of the seizure, the securities purchased with the fraud proceeds and with a loan secured by equities purchased with fraud proceeds, were valued at over $10 million.
Schort was arrested on Wednesday by FBI agents and made his initial appearance in federal court the same day. Loyd was arrested on Thursday, and was scheduled to make his first court appearance on Friday.
The case is being investigated by the FBI with the assistance of the Small Business Administration and the Internal Revenue Service.