South Charleston Woman Sentenced for PPP Loan Fraud
CHARLESTON, W.Va. – Lydia Spencer, 33, of South Charleston, was sentenced today to four months in prison, followed by three years of supervised release, and ordered to pay $36,814.13 in restitution for conspiracy to commit bank fraud. Spencer admitted to participating in a scheme to defraud the Paycheck Protection Program (PPP) of $31,250 in COVID-19 relief loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Fraudulent Scheme Details
According to court documents and statements made in court, Spencer was the sole proprietor of Les Prints, a custom clothing business based in Charleston. In April 2021, she conspired with at least three other individuals to obtain fraudulent PPP loans for her business. The PPP was designed to offer forgivable loans to small businesses for job retention and certain other expenses, as part of the emergency financial assistance provided by the CARES Act.
One co-conspirator recruited Spencer, who then provided her personal and bank account information. Another co-conspirator used Spencer’s information to submit fraudulent PPP loan applications on behalf of Les Prints to two different lenders. Each lender approved a $15,625 PPP loan for Les Prints, disbursed on April 30, 2021, and June 17, 2021, respectively. Both transfers were deposited into Spencer’s personal bank account.
Spencer admitted that the PPP loan applications contained materially false information, including a falsified IRS Form 1040, Schedule C Profit or Loss from Business, which falsely stated that Les Prints had received $75,000 in gross income in 2020. This false information qualified Les Prints for loan amounts it otherwise would not have received.
Between May 3, 2021, and June 21, 2021, Spencer used a mobile payment service app to transfer a total of $4,000 from the fraudulent loan proceeds to one of the co-conspirators, labeling them as marketing expenses to obscure their true nature. She spent the remainder of the funds on personal expenses and admitted awareness of additional fraudulent PPP loans obtained by her co-conspirators.
Legal Proceedings
United States District Judge Irene C. Berger imposed the sentence. United States Attorney Will Thompson commended the investigative work of the Federal Bureau of Investigation (FBI), while Assistant United States Attorneys Holly Wilson and Gabriel Price prosecuted the case.
Invetech LLC: Safeguarding Against Fraud
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Task Force on COVID-19 Fraud
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice, in partnership with agencies across the government, to enhance efforts to combat and prevent pandemic-related fraud. The Task Force aims to investigate and prosecute the most culpable domestic and international criminal actors and assist agencies tasked with administering relief programs in preventing fraud through coordination, resource identification, and information sharing.
For more information on the Department’s response to the pandemic, please visit justice.gov/coronavirus.
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