COVID Relief Fraudsters Sentenced To Prison

Summary

A press release published 2022-05-18 by the U.S. Attorney's Office for the Middle District of Florida announcing that U.S. District Judge Anne C. Conway sentenced Tomas Ziupsnys to five years in federal prison for conspiracy to commit bank fraud, bank fraud and aggravated identity theft, and Holly Lynn Urban to two years and six months for conspiracy to commit bank fraud. The office states that both were ordered to forfeit $632,000 and that they pleaded guilty on February 3, 2022 and January 20, 2022. According to the release, they submitted six PPP applications with false employee, payroll and revenue figures for five companies, and Ziupsnys used other people's Social Security numbers on false tax forms. Three loans totaling approximately $897,000 were funded, of which $265,300 was frozen by the bank.

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Orlando, Florida – U.S. District Judge Anne C. Conway has sentenced Tomas Ziupsnys (39, Kissimmee) to five years in federal prison for conspiracy to commit bank fraud, bank fraud, and aggravated identity theft. Holly Lynn Urban (36, Kissimmee) was sentenced to two years and six months in federal prison for conspiracy to commit bank fraud. The court also ordered both defendants to forfeit $632,000, which they had obtained from their participation in the bank fraud conspiracy. Ziupsnys had pleaded guilty on February 3, 2022, and Urban had pleaded guilty on January 20, 2022.
According to court documents, Ziupsnys and Urban conspired to defraud multiple banks by submitting false Paycheck Protection Program (PPP) loan applications to the Small Business Administration (SBA) and PPP-approved lenders.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law that was enacted in March 2020.  It was designed to provide emergency financial assistance to millions of Americans who suffered the economic effects of the COVID-19 pandemic. One source of relief that the CARES Act provided was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allowed qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses were required to use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allowed the interest and principal to be forgiven if the business spent the proceeds on these expenses within a set time period and used at least a certain percentage of the loan toward payroll expenses.
In furtherance of their bank fraud conspiracy, Ziupsnys and Urban submitted six loan applications that contained numerous false representations about the number of employees, average monthly payroll expenses, and annual sales revenue of five companies that they purportedly owned and controlled. Ziupsnys also submitted fabricated tax, payroll, and revenue documents in support of those six fraudulent PPP applications.
Moreover, Ziupsnys submitted false tax forms in support of at least one of the applications, using without authorization the personally identifiable information of Victim-1 and Victim-1’s two minor children. Ziupsnys had obtained the victims’ Social Security numbers when he contacted Victim-1 and expressed interest in employing Victim-1 and the two children in connection with the FedEx routes that he and Urban intended to purchase with PPP funds.  After obtaining the victims’ Social Security numbers, Ziupsnys did not contact Victim-1 again concerning employment, and instead used the Social Security numbers on the false tax forms that he submitted in support of one of the loan applications that he and Urban submitted.
Ziupsnys and Urban’s false and fraudulent representations caused the SBA and the PPP lenders to approve and fund three PPP loans, totaling approximately $897,000 ($265,300 of which the bank froze before Urban and Ziupsnys could access the funds). Ziupsnys and Urban unlawfully transferred a significant portion of the PPP funds to an escrow account in connection with their intended purchase of a FedEx route.
In addition to conspiring with Urban, Ziupsnys submitted three additional fraudulent PPP loan applications, requesting more than $497,000. None of those applications were funded.
This case was investigated by the Federal Bureau of Investigation, the Federal Deposit Insurance Corporation Office of the Inspector General, and the Small Business Administration Office of the Inspector General. It was prosecuted by Assistant United States Attorney Emily C. L. Chang.

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