Federal Jury Convicts Eden Prairie Man of COVID Relief Fraud, Aggravated Identity Theft, and Money Laundering

Summary

Press release from USAO - Minnesota, published 2024-08-06, announcing that following a ten-day trial a federal jury convicted an Eden Prairie man, Harold Bennie Kaeding, 75, of fraudulently applying for more than $2.1 million in COVID-19 relief funds. As proven at trial, between March and May 2020 Kaeding applied for at least $2,182,625 in loans through the Paycheck Protection Program and the Economic Injury Disaster Loan Program, using the names of close family members to submit applications for six different purported corporate entities. The release states that Kaeding fabricated tax documents and manufactured bank statements. The jury found Kaeding guilty on August 2, 2024, of three counts of wire fraud, three counts of aggravated identity theft, and one count of money laundering.

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ST. PAUL, Minn. – Following a ten-day trial, a federal jury convicted an Eden Prairie man of fraudulently applying for more than $2.1 million in COVID-19 relief funds and then spending the fraud proceeds on himself, announced U.S. Attorney Andrew M. Luger.
As proven at trial, between March and May 2020, Harold Bennie Kaeding, 75, applied for at least $2,182,625 in loans through the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (EIDL) Program. Kaeding used the name of his own close family members to submit the loan applications in the names of six different purported corporate entities.  But these entities filed no tax returns and did not report the payment of wages to a single employee for calendar years 2019 and 2020. Kaeding instead fabricated tax documents, manufactured bank statements, and submitted other records to ensure the applications appeared legitimate.  These false statements to lenders included the number of employees a given entity employed, the amount of average monthly payroll expenses, and false statements about the intended use of the loan proceeds.
As a result of his material falsehoods and omissions, Kaeding initially received approximately $1,642,670 in fraud proceeds before some banks detected irregularities and clawed back some of the money. This left Kaeding with $658,490 in fraud proceeds, which he transferred to bank accounts—often opened in the names of close family members—that he controlled.  Kaeding then used his fraud proceeds to, among other things, get his personal residence out of impending foreclosure, purchase an SUV, and stockpile more than $80,000 in cash.  In early 2021, Kaeding fled to Colombia in an apparent attempt to evade prosecution. Law enforcement eventually located Kaeding and successfully deported him back to the United States to face prosecution.
Following a ten-day trial before Judge Eric C. Tostrud in U.S. District Court, a jury found Kaeding guilty on August 2, 2024, of three counts of wire fraud, three counts of aggravated identity theft, and one count of money laundering. A sentencing hearing will take place at a later date.
This case is the result of an investigation conducted by the FBI and IRS.
Assistant U.S. Attorneys Jordan L. Sing and Robert M. Lewis tried the case.

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