United States v. Ryan Carruthers

Case summary

A Commerce Township, Michigan, resident was charged with wire fraud in a criminal complaint for his alleged role in a scheme to obtain $963,000 from pandemic loan programs for fictitious businesses.¹

According to the complaint, Ryan Carruthers, 42, applied for 14 Paycheck Protection Program loans between April 2020 and April 2021 in the names of various businesses, plus a fifteenth loan under the Economic Injury Disaster Loan program. The complaint alleges that his businesses, with names like "Cobra Kai Karate" and "Pure Juice Bar & Café," were fictitious. It states that there is no evidence any of them had actual employees, although he claimed each had between three and fifteen. Many were not even incorporated until after March 2020, which would have rendered them ineligible for PPP loans. The complaint further alleges that he applied for approximately $963,000 across the 15 loans and that 13 were funded, with disbursements of about $851,000. He used the proceeds, it says, to pay off the roughly $251,000 balance of his home mortgage and to buy a Sea-Doo personal watercraft, among other things.¹

Carruthers pleaded guilty to one count of wire fraud before U.S. District Judge Paul D. Borman. According to the plea agreement, he submitted 12 PPP loan applications and one EIDL application. The agreement states that his business entities were shells that existed on paper only, with no revenue, employees or ongoing operations of any sort, and that the average monthly payroll amounts in the applications were fictitious.²

Judge Borman sentenced Carruthers, now identified as Ryan T. Carruthers, 42, to two years and three months in prison and ordered $851,963 in restitution. The case was investigated by Homeland Security Investigations' Detroit Field Office, with assistance from the SBA Office of Inspector General, and prosecuted by Assistant U.S. Attorney John K. Neal.³

Notes

1. U.S. Attorney's Office for the Eastern District of Michigan, "Commerce Township Resident Charged In COVID-19 Loan Fraud Scheme" (original), February 3, 2023. ↩₁ ↩₂
2. U.S. Attorney's Office for the Eastern District of Michigan, "Commerce Township Man Pleads Guilty in Pandemic Loan Fraud Scheme" (original), August 7, 2023. ↩
3. U.S. Attorney's Office for the Eastern District of Michigan, "Commerce Township Man Sentenced in Pandemic Relief Fraud Scheme" (original), December 6, 2023. ↩

Summary written from the documents on this page; every sentence is sourced.