Gresham Man Pleads Guilty to Stealing Covid Relief Funds

Summary

This announcement says Gresham, Oregon man Justin Allen Cunningham, 40, pleaded guilty to one count of wire fraud for stealing more than $77,000 in funds intended to help small businesses. According to court documents, a Paycheck Protection Program (PPP) loan application for Cunningham's online sneaker retailer, "JC shoe juice," falsely claimed that the business had operated since 2015, had six employees, and generated more than $460,000 in gross income in 2019. Cunningham was issued a loan worth more than $77,000. He faces a maximum sentence of 20 years in prison and will be sentenced on January 23, 2023, and has agreed to pay more than $81,000 in restitution to SBA and ReadyCap Lending, LLC.

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Full text

PORTLAND, Ore.—A Gresham, Oregon man pleaded guilty today for stealing more than $77,000 in funds intended to help small businesses during the COVID-19 pandemic.
Justin Allen Cunningham, 40, pleaded guilty to one count of wire fraud.
According to court documents, in the late summer or early winter of 2021, Cunningham learned from friends about the opportunity to procure Paycheck Protection Program (PPP) loans guaranteed by the U.S. Small Business Administration (SBA) by submitting fraudulent loan applications on behalf of fake business entities. The PPP program, originally authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress in March 2020, provided emergency financial assistance to American employers suffering the economic effects of the COVID-19 pandemic and resulting shutdowns.
To facilitate his scheme, Cunningham paid his friends for their help securing him a loan on behalf of a sole proprietorship he ran as a hobby: an online sneaker retailer called “JC shoe juice.” Cunningham obtained an employer identification number from the IRS and opened an online business bank account. He provided this information to a friend who created bogus tax returns for Cunningham’s company and submitted a PPP loan application on his behalf. The loan application falsely claimed that JC shoe juice had operated since 2015, had six employees, and generated more than $460,000 in gross income in 2019. As a result of these false representations, Cunningham was issued a loan worth more than $77,000.
On January 21, 2022, a federal grand jury in Portland returned an indictment charging Cunningham with one count of wire fraud.
Cunningham faces a maximum sentence of 20 years in prison, a $250,000 fine or twice his gross gains or his victims’ gross losses, and three years’ supervised release. He will be sentenced on January 23, 2023, by U.S. District Court Judge Karin J. Immergut.
As part of his plea agreement, Cunningham has agreed to pay more than $81,000 in restitution to SBA and ReadyCap Lending, LLC, the business lending company that issued Cunningham the PPP loan.
This case was investigated by the U.S. Treasury Inspector General for Tax Administration (TIGTA), the SBA Office of Inspector General, and the FBI. Assistant U.S. Attorney Ryan W. Bounds is prosecuting the case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at:
https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
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