Man Sentenced to 46 Months in Federal Prison for PPP Loan Fraud

Summary

A U.S. Attorney's Office for the District of Colorado press release dated 2025-06-10 announcing that Richard Nieto of Morrison, Colorado was sentenced to 46 months in federal prison and ordered to pay $962,438.85 in restitution for wire fraud and money laundering tied to PPP loans. According to the plea agreement, Nieto submitted three fraudulent PPP applications seeking $1,117,903.56 and obtained two totaling $913,551.88: $175,384.83 for Denver Pro Painting & Contracting with inflated payroll and fabricated Forms 941, and $738,167.05 for DenPro, which had no payroll or employees. It states that he created 87 fake payroll checks and paystubs for forgiveness, and one loan was fully forgiven. He spent the money on a mortgage, bitcoin, gold and silver coins and investments. Case Number 22-cr-00262-WJM.

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DENVER – The U.S. Attorney’s Office for the District of Colorado announces that Richard Nieto, age 39, of Morrison, Colorado, was sentenced to 46 months in federal prison and ordered to pay $962,438.85 in restitution for engaging in wire fraud and money laundering in connection with obtaining two Paycheck Protection Program (PPP) loans during the COVID-19 pandemic.
According to the plea agreement, the defendant submitted three fraudulent PPP loan applications to a lender seeking $1,117,903.56 and was successful in obtaining two PPP loans totaling $913,551.88.
In the first successful application for $175,384.83, the defendant inflated the number of employees and average monthly payroll for his business, Denver Pro Painting & Contracting, that had operated before the pandemic and fabricated Forms 941 that did not match the tax returns filed with the IRS. He then submitted a second successful PPP application for $738,167.05 to the same lender for another business, DenPro, that had no payroll or employees and was not operating at all. In this second application, the defendant made up $1,771,601.04 in annual payroll while fabricating fourth quarter tax returns to support the lies on the application.
Before making a single payment on either loan, the defendant submitted fraudulent applications for loan forgiveness. In support of the forgiveness applications, the defendant created a total of 87 fake payroll checks and paystubs that falsely indicated that each check related to a specific pay period and employee and that the defendant’s companies had withheld taxes so that they would qualify for loan forgiveness. One of the defendant’s PPP loans was fully forgiven.
Despite telling the lender that he would use the PPP loan money on business expenses, the defendant transferred PPP loan money through multiple intermediate accounts before using it on personal expenditures and investments. Among other transactions, the defendant used loan money to pay a home mortgage, purchase bitcoin, contribute to an investment account, buy gold and silver coins, and invest in a friend’s startup business.
“This is another case of someone using for personal gain a program meant to help people suffering during the COVID-19 pandemic,” said Acting United States Attorney J. Bishop Grewell. “I want the public to know that we are aggressively prosecuting people who stole from this relief program.”
“Mr. Nieto went to great lengths to abuse a program meant for hardworking small business owners, seeking only to enrich himself.” said Amanda Prestegard, Special Agent in Charge, IRS-CI Denver Field Office. “We are proud to partner with the U.S Attorney’s Office to aggressively pursue those who defrauded this and other CARES Act programs and hold criminals like Mr. Nieto accountable.”
United States District Judge William J. Martinez presided over the sentencing.
The Internal Revenue Service Criminal Investigation conducted the investigation.  Assistant United States Attorneys Craig Fansler and Martha Paluch handled the prosecution of the case.
Case Number: 22-cr-00262-WJM

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