Rush City Woman Pleads Guilty to $1.8 Million Scheme Involving Romance Fraud and Federal Pandemic Programs

Summary

A press release of the U.S. Attorney's Office for the District of Minnesota, dated Monday, May 22, 2023, announcing that Gayle Joyce Ferngren, 69, of Rush City pleaded guilty to one count of mail fraud before Judge John R. Tunheim. According to court documents, from 2017 through April 2022 Ferngren and others laundered proceeds of romance fraud scams and schemes against Federal Pandemic Assistance Programs. In the guilty plea, Ferngren acknowledges receiving at least 68 debit cards with approximately $1.3 million in fraudulent unemployment benefits from California and Nevada, and the release states that Ferngren laundered at least $1.8 million in total. It also describes a PPP loan of approximately $20,833 obtained in Ferngren's name through an application submitted by another scheme participant.

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Full text

PRESS RELEASE



Rush City Woman Pleads Guilty to
$1.8 Million Scheme Involving
Romance Fraud and Federal
Pandemic Programs
Monday, May 22, 2023


For Immediate Release
U.S. Attorney's Office, District of Minnesota

MINNEAPOLIS – A Rush City woman has pleaded guilty to mail fraud after participating
in multiple schemes that defrauded individuals throughout the United States,
announced U.S. Attorney Andrew M. Luger.

According to court documents, from 2017 through April 2022, Gayle Joyce Ferngren, 69,
and others participated in a scheme to launder proceeds that were fraudulently
obtained from victims throughout the United States, including the proceeds of romance
fraud scams and schemes to defraud Federal Pandemic Assistance Programs.

According to her guilty plea, from approximately June 2020 through December 2020,
Ferngren acknowledges that she received at least 68 debit cards containing
approximately $1.3 million in fraudulent unemployment benefits from California and
Nevada to which she was not entitled. After receiving the fraudulent proceeds, Ferngren
kept a portion for herself and transmitted most of the funds to other scheme
participants, including to individuals located overseas. In total, Ferngren laundered at
least $1.8 million in fraud proceeds.

According to her guilty plea, on or about May 27, 2021, a scheme participant—not
Ferngren—submitted an application in Ferngren's name seeking a PPP loan in the
amount of approximately $20,833.00. Among other falsehoods, the PPP application
claimed that Ferngren had worked as an independent contractor doing residential
remodeling since 2017 and included falsified tax records and income claims. Ferngren
did not sign this application or fill out the information contained within it. Based on the
false information presented by another scheme participant, the fraudulent PPP loan
application was approved and approximately $20,833 in fraudulent PPP proceeds were
deposited into Fergren’s bank account in May 2021, which she knew she was not
entitled to receive.

Ferngren pleaded guilty today in U.S. District Court before Judge John R. Tunheim to
one count of mail fraud. A sentencing hearing will be scheduled at a later time.

This case is the result of an investigation conducted by the U.S. Postal Inspection
Service, the U.S. Department of Labor–Office of Inspector General, and the FBI.

Assistant U.S. Attorneys Matthew S. Ebert and Allison K. Ethen are prosecuting the case.
Updated May 22, 2023

Topic
FINANCIAL FRAUD
Component
USAO - Minnesota


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