A Henrico County man pleaded guilty Wednesday to defrauding the U.S. Small Business Administration out of $1.1 million in COVID-19 relief funds by filing fraudulent applications for Paycheck Protection Program loans on behalf of two non-operational businesses he formed.
Kortney T. Kelley, 45, spent at least $142,711 of the stolen proceeds at various casinos and for gaming purposes, and transferred at least $834,077 in additional funds to his personal brokerage accounts, according to a statement of facts filed by the U.S. Attorney's Office. The scheme was carried out between April 8, 2020, through Aug. 31, 2021.
"The purpose of the scheme was for the defendant to unlawfully enrich himself by obtaining disaster-related benefits in the form of PPP loan proceeds under false and misleading pretenses; [and] submitting false statements, false certifications and forged documents in connection with four separate PPA loan applications to [the Bank of America] and the SBA," wrote Assistant U.S. Attorney Avi Panth in laying out the government's case.
Authorized by Congress through the CARES Act, the PPP is a federal SBA program that provided forgivable loans through participating financial institutions to small businesses for job retention and other expenses during the pandemic.
During a hearing in U.S. District Court in Richmond, Judge David J. Novak convicted Kelley on his guilty plea to wire fraud and set sentencing for May 31. As part of his plea agreement, Kelley will be required...
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