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A Dormant Trucking Company Claimed 26 Employees and Sought a Second PPP Loan Anyway

A federal judge in Harrisburg sentenced Keith McConnell, 43, of Carlisle, Pennsylvania, to 18 months in prison for a wire fraud and money laundering scheme that sought $467,200 in PPP funds guaranteed by the Small Business Administration. U.S. District Judge Christopher C. Conner imposed the sentence on April 5, 2022.1

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McConnell submitted fraudulent PPP applications and forged documents on behalf of his Carlisle-area trucking company, KB Transportation LLC, according to then-U.S. Attorney John C. Gurganus. In both 2019 and 2020, KB Transportation LLC was not operating, had no employees, and had no payroll expenses. On June 5, 2020, McConnell nonetheless certified that the company employed 26 people with monthly payroll expenses of $124,800.1

The false certification produced $312,000 in PPP loan proceeds. Within weeks, McConnell spent the money on a residential property, two personal vehicles, cash withdrawals, and stock market investments, prosecutors said. On January 20, 2021, McConnell used KB Transportation LLC to apply for a second PPP loan of $155,200, again submitting false and fraudulent documents; that loan was never disbursed.1

His wife, Christina McConnell, 43, also of Carlisle, used $232,300 of the loan money to buy personal vehicles and a residential property in June and July 2020. She was sentenced on February 28, 2022, to two years of probation, including four months of home confinement, for illegal monetary transactions, and paid her restitution in full before sentencing.2

Keith McConnell had been charged by criminal information in June 2021 and pleaded guilty to the wire fraud and related money laundering offenses.32 Besides the prison term, Judge Conner ordered three years of supervised release and $312,200 in restitution. As of the DOJ announcement, McConnell had repaid $237,515.50 of it. The court docket, M.D. Pa. No. 1:21-cr-00167, closed on April 6, 2022.14

The Internal Revenue Service's Criminal Investigation division investigated the case. Assistant U.S. Attorney Samuel S. Dalke prosecuted it.1

Documents cited

Notes

  1. U.S. Attorney's Office for the Middle District of Pennsylvania, "Owner Of Trucking Business Sentenced To 18 Months' Imprisonment For Covid-Relief Fraud Scheme" (original), April 6, 2022. ↩1 ↩2 ↩3 ↩4 ↩5
  2. U.S. Attorney's Office for the Middle District of Pennsylvania, "Carlisle Woman Sentenced For Illegal Monetary Transactions Involving Covid-19 Relief Funds" (original), March 1, 2022. ↩1 ↩2
  3. U.S. Attorney's Office for the Middle District of Pennsylvania, "Owner Of Carlisle Area Trucking Business Charged With Covid-Relief Fraud" (original), June 4, 2021. ↩
  4. United States v. McConnell, M.D. Pa. No. 1:21-cr-00167, docket, https://www.courtlistener.com/docket/60845385/united-states-v-mcconnell/. ↩
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