SPOKANE, WA – Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced today that a federal grand jury has indicted three individuals for fraud in connection with COVID-19 relief funding. The Indictment is the most recently announced by the Eastern Washington COVID-19 Strike Force, which has brought criminal charges against numerous individuals and recovered millions of dollars in fraudulently obtained COVID relief funding.
From USAO:
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act provided a number of programs through which eligible small businesses could request and obtain relief funding intended to mitigate the economic impacts of the pandemic for small and local businesses. One such program, the Paycheck Protection Program (PPP), provided government-backed funding to small businesses which could be forgiven so long as the proceeds were used for payroll and other eligible expenses. Another program, the Economic Injury Disaster Loan (EIDL) program, provided low interest loans that could be deferred until the conclusion of the pandemic to provide “bridge” funding for small businesses to maintain their operations during shutdowns and other economic circumstances caused by the pandemic. The PPP and EIDL programs have provided billions of dollars in aid, the vast majority of which have not been paid back, including hundreds of millions of dollars disbursed within Eastern Washington.
The Indictment announced today charges Kelly Jo Driver, of South Carolina, David Kurt Schneider, of Kennewick, Washington, and Leif Gerald Larsen, of Pasco, Washington, with conspiracy to commit wire fraud and bank fraud, wire fraud, bank fraud, and false, fictitious, or fraudulent claims. Additionally, David Kurt Schneider is charged with money laundering. The Indictment alleges that the trio fraudulently obtained at least $250,000 in CARES Act funding through the PPP and EIDL programs, and submitted fraudulent applications seeking at least an additional $1,000,000 in CARES Act funding that were ultimately not approved. The indictment alleges that as part of the conspiracy, all three defendants submitted false information to the SBA and participating PPP lenders regarding gross revenues, number of employees, and amount spent on payroll in an attempt to obtain CARES Act funds to which they were not otherwise entitled. The indictment alleges that defendants submitted funding applications in the name of Larsen Firearms, owned by Leif Gerald Larsen, and Solar Mobility LLC, RealNZ Water LLC, and Tempest Tactical Solutions, LLC, all owned by David Kurt Schneider. The Indictment alleges that Kelly Jo Driver created fraudulent payroll and tax forms that were submitted in support of the applications, and that, for her part in the scheme, Kelly Jo Driver received 10% of the funds disbursed by the SBA and participating lenders.
“Many struggling, deserving small businesses requested money from COVID-19 relief programs. Because of the overwhelming need, the programs quickly ran out of money and some businesses were not able to obtain the critical funding they needed,” said U.S. Attorney Waldref. “We created the Eastern Washington COVID-19 Fraud Strike Force to combat pandemic-related fraud and protect local and small business that provide critical services for our community and support our economy.”
In February 2022, U.S. Attorney Waldref and the U.S. Attorney’s Office (USAO) began working with federal law enforcement agencies to create and launch a COVID-19 Fraud Strike Force that would leverage partnerships between different agencies to aggressively investigate and prosecute fraud against COVID-19 relief programs in Eastern Washington. The Strike Force consists of agency representatives from the USAO, Small Business Administration (SBA) Office of Inspector General (OIG), Federal Bureau of Investigation (FBI), U.S. Department of the Treasury Inspector General for Tax Administration (TIGTA), U.S. Secret Service, U.S. Homeland Security Investigations, U.S. Department of Veterans Affairs OIG, General Services Administration OIG, Department of Homeland Security (DHS) OIG, Internal Revenue Service, Department of Energy OIG, and others.
The fraud charges carry sentences of up to 30 years in federal prison as well as restitution for fraudulently-obtained funds. This case was investigated by the Eastern District of Washington COVID-19 Fraud Strike Force and by FBI and SBA OIG. This case is being prosecuted by Assistant United States Attorneys Jeremy J. Kelley and Frieda K. Zimmerman.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
4:24-CR-6004-SAB
