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Grand Rapids Man Pleads Guilty To Covid-19 Relief Fraud

Summary

A press release published December 15, 2022 (source office USAO - Michigan, Western) states that U.S. Attorney Mark Totten announced that Kurtis James VanderMolen, 50, of Grand Rapids, Michigan pleaded guilty to bank fraud and money laundering. It describes a scheme to obtain approximately $170,000 in Paycheck Protection Program (“PPP”) loans for a company that did not exist, Breakout Strategies Corporation. According to the release, a PPP application went to a New Jersey bank in July 2020, and a second application followed in February 2021, with approximately $100,641 and $69,361 received from the first and second loans. It states that bank fraud carries a maximum penalty of thirty years’ imprisonment and money laundering a maximum of ten years’ imprisonment.

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“Grand Rapids Man Pleads Guilty To Covid-19 Relief Fraud.” Original at www.justice.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2022-12-15-grand-rapids-man-pleads-guilty-to-covid-19-relief-fraud-a29-ed76c54018/, SHA-256 da6f094066353891d59118218cb9c2c180e568ca6502b38207bedd8bbee071a1.

Full text

Kurtis VanderMolen Obtained Paycheck Protection Program Loans for a Fake Company and Used the Money for a BMW Convertible and Other Personal Expenses
GRAND RAPIDS, MICHIGAN
— U.S. Attorney Mark Totten announced today that Kurtis James VanderMolen, 50, of Grand Rapids, Michigan pleaded guilty to bank fraud and money laundering in connection with a scheme to obtain approximately $170,000 in Paycheck Protection Program (“PPP”) loans for a company that did not exist.  Bank fraud carries a maximum penalty of thirty years’ imprisonment; money laundering carries a maximum of ten years’ imprisonment.
In July 2020, VanderMolen submitted a PPP loan application to a New Jersey bank for a fake company, Breakout Strategies Corporation.  VanderMolen claimed that Breakout Strategies had eleven employees and sent the bank fraudulent bank records and fake payroll records to make it appear as though Breakout Strategies was a real business.  VanderMolen received approximately $100,641 in his first PPP loan, which he used for personal expenses, including a BMW 650i convertible.  In February 2021, when VanderMolen ran out of his initial PPP loan proceeds, he applied for a second PPP loan on behalf of Breakout Strategies and again submitted fraudulent bank records, fake payroll records, and false tax documents to make it appear as though Breakout Strategies was a real company.  VanderMolen obtained approximately $69,361 from the second PPP loan that he used for personal expenses, including for his wedding aboard a boat in Florida.
“This was federal aid that was intended to support our country’s critical small businesses, not to buy luxury cars or pay for wedding expenses,” said
U.S. Attorney Mark Totten
.  “My office will continue to aggressively prosecute COVID-19 relief fraud using all available remedies.”
“The Paycheck Protection Program was a critical lifeline for Michigan’s small businesses, and the FBI will not tolerate people taking advantage of that program to enrich themselves,” said
James A. Tarasca, Special Agent in Charge of the FBI in Michigan
. “This kind of fraud may have prevented honest business owners from getting the help they needed to weather the early days of the pandemic. The FBI remains committed to finding people who commit fraud and holding them accountable for their crimes.”
This case was investigated by the FBI and the U.S. Attorney’s Office for the Western District of Michigan.  Assistant U.S. Attorney Adam Townshend is prosecuting the case.
Anyone with information about attempted frauds involving COVID-19 relief can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline (1-866-720-5721) or through the Center’s Web Complaint Form (
https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
).
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