Local Business Owner Indicted for Fraudulently Submitting PPP Loan — Kristen Fenrick, Klearly Kristen Inc., Houston

Summary

A news release published April 8, 2024, announcing that a federal grand jury returned a six-count indictment against Kristen Fenrick for conspiracy to commit wire fraud, wire fraud and conducting a monetary transaction in criminally derived property. The release says the charges allege a fraudulent Paycheck Protection Program (PPP) loan application for Klearly Kristen that inflated the number of employees and average monthly payroll expenses, supported by allegedly fraudulent IRS documents. It states that a lender approved a loan in June 2020 for $405,340, which the SBA fully guaranteed and later forgave. The charges allege the PPP funds went to personal benefit, such as the lease of a luxury vehicle. The release says an indictment is a formal accusation, not evidence.

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HOUSTON – A federal grand jury has returned a six-count indictment against a former Houston resident for conspiracy to commit wire fraud, wire fraud and conducting a monetary transaction in criminally derived property, announced U.S. Attorney Alamdar S. Hamdani.
According to the indictment, unsealed upon her appearance in court, Kristen Fenrick, 52, now of Dallas, was the owner of Klearly Kristen Inc., a business engaged in the sale of jewelry and accessories. The charges allege she submitted a fraudulent loan application via the Paycheck Protection Program (PPP) at the time of the COVID-19 pandemic.
Fenrick grossly inflated the number of employees her business purportedly had as well as its average monthly payroll expenses, according to the charges. In support of her application, Fenrick allegedly submitted fraudulent IRS documents to the lender. She also allegedly paid a co-conspirator to assist her in the preparation and submission of the false application.
Based on her misrepresentations, the indictment alleges a third-party lender with delegated authority from the Small Business Administration (SBA) approved a loan to Klearly Kristen in June 2020 for $405,340. According to the allegations, the SBA fully guaranteed and subsequently forgave the loan based on continued misrepresentations about the business’s employee headcount and payroll expenses.
The charges allege Fenrick used the PPP funds for her own personal benefit, such as the lease of a luxury vehicle, and not for the purpose for which the loan was intended.
Both before and after the PPP loan, Fenrick also allegedly made several unsuccessful attempts to secure an Economic Injury Disaster Loan for Klearly Kristen and several other purported businesses.
If convicted, Fenrick faces up to five years in prison for conspiracy to commit wire fraud, a maximum of 20 years on each of the substantive wire fraud counts and up to 10 years imprisonment for conducting a monetary transaction in criminally derived property. She could also be ordered to pay up to $250,000 in fines.
The SBA-Office of Inspector General conducted the investigation with the assistance of the Secret Service. Assistant U.S. Attorney Shirin Hakimzadeh is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

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