Eleventh Circuit Affirms Convictions And Sentence Of Fort Myers Business Owner For COVID-Relief And Mortgage Fraud

Summary

A June 6, 2023 press release from the U.S. Attorney's Office for the Middle District of Florida announcing that the United States Court of Appeals for the Eleventh Circuit affirmed the convictions and sentence of Casey David Crowther, 37, of Fort Myers in one of the first federal appeals involving a fraudulent COVID-relief loan (Case No. 21-12255). The release states that a jury convicted Crowther in March 2021 of bank fraud, a false statement and money laundering over a $2.1 million PPP loan for Target Roofing and Sheet Metal, Inc., and that Judge John E. Steele sentenced him to 37 months, and says the court rejected his argument that he could use PPP funds for any purpose if he intended to repay. It recounts trial evidence that he spent nearly $700,000 on a boat and $55,000 on a horse.

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Atlanta, Georgia – The United States Court of Appeals for the Eleventh Circuit in Atlanta has affirmed the convictions and sentence of Casey David Crowther (37, Fort Myers) in one of the first federal appeals involving a fraudulent COVID-relief loan (11th Cir. Case No. 21-12255). In March 2021, a federal jury in Fort Myers had found Crowther guilty of bank fraud, making a false statement to a lending institution, and two counts of money laundering in connection with his Paycheck Protection Program loan scheme. (Before trial, Crowther had pleaded guilty to other bank-fraud and false-statement charges related to a separate scheme in which Crowther had created fake bank statements to justify a loan for a nearly $1.3 million waterfront house in St. James City, Florida.) United States District Judge John E. Steele sentenced Crowther to 37 months in prison and three years of supervised release. Crowther appealed his convictions on the PPP charges and his sentence. Among other things, he argued that he was permitted to use PPP funds for any purpose—notwithstanding unambiguous restrictions in the loan documents that he signed—so long as he intended to repay the loan. The Eleventh Circuit rejected Crowther’s arguments and affirmed his convictions and sentence.
Congress created the Paycheck Protection Program to facilitate up to $349 billion in low-interest, potentially forgivable loans for qualified businesses struggling to make payroll or pay operating expenses in the early days of the COVID-19 pandemic. PPP loans were provided by private lenders and guaranteed by the Small Business Association and could be used only for payroll and certain other expenses necessary to maintain business operations during the pandemic (primarily payroll). In April 2020, Crowther obtained a $2.1 million PPP loan by stating that he intended to use the money for payroll, rent, and utilities for his company, Target Roofing and Sheet Metal, Inc. According to the evidence presented at trial, he instructed his bank to deposit the funds into a secret account separate from his company’s main operating account. He quickly used the account for personal use, spending nearly $700,000 on a 40-foot pleasure boat and $55,000 on a horse. He also used PPP funds to pay down personal credit-card debt, a loan owed to an old business partner, and his company’s line of credit (which were not permitted uses). When Crowther’s bank warned him that he was likely to be audited, he attempted to conceal his fraud by falsely “hiring” family members and dozens of fictitious employees to inflate his company’s apparent payroll. He hid the true purpose of certain wire transfers (saying that the boat payment was an “equipment purchase” and the horse payment was for “roofing material”). All the while, taxpayers continued to fund the low-interest loan that had been intended to protect Crowther’s business and employees.
This case was investigated by the United States Secret Service. It was prosecuted in U.S. District Court by Assistant United States Attorneys Trent Reichling and Michael V. Leeman. The appeal was handled by Assistant United States Attorney Sean Siekkinen.

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