Pewaukee man's $1M+ PPP fraud nets prison time

 

A 46-year-old Pewaukee man has been sentenced to four years and nine months in prison for Paycheck Protection Program (PPP) fraud.

According to the U.S. Attorney's Office, Thomas Smith fraudulently obtained more than $1 million in loans guaranteed by the Small Businesses Administration under the CARES Act.

In addition to the prison sentence, Smith has been ordered to spend two years on supervised release and pay restitution of $960,000.

Smith pleaded guilty to the offense in February. According to court documents, the fraud sought funds through applications to a federally insured financial institution on behalf of eight different companies. According to his plea agreement, Smith made false and misleading statements about the companies' respective payroll expenses.

Once funds were received, officials say, Smith told co-conspirators to give him portions of the PP funds and used the money for personal expenses.

The CARES Act, enacted in March 2020, authorized hundreds of billions of dollars in forgivable small business loans for job retention and other expenses through the PPP.

In the months since the PPP began, fraud attorneys have prosecuted more than 100 people in more than 70 criminal cases – seizing more than $65 million in fraudulently obtained funds. 

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