TULSA, Okla. — A Tulsa couple who fraudulently applied for approximately $2.7 million in Paycheck Protection Program (PPP) Loans pleaded guilty in federal court, according to U.S. Attorney Clint Johnson.
PPP loans are guaranteed by the Small Business Administration (SBA) under the CARES Act.
William Mark Sullivan, 49, and his wife, Michelle Cadman-Sullivan, 42, both pleaded guilty to Conspiracy to Commit Bank Fraud. The plea agreements call for the defendants to pay $114,281.58 in restitution to Arvest Bank and $628,645.00 to Exchange Bank, totaling $742,926.58. This amount represents the proceeds illegally obtained by the couple, according to court documents.
A federal judge will determine appropriate sentences and restitution amounts at the couple’s sentencing hearings. These hearings will be scheduled by the court.
“The Sullivans applied for and secured numerous Paycheck Protection Program loans fraudulently,” said Johnson. “The $743,000 was intended to go to legitimate small business owners who were fighting to serve our community.”
In their plea agreements, the Sullivans explained that between April 8, 2020 and May 11, 2020, they conspired together to submit false statements and reports to Arvest Bank and Exhange Bank when they applied for several PPP loans, totaling around $2.7 million. The couple submitted false W2s, false Form 941s and false 2019 IRS Schedule Cs (Form 1040) in six PPP loan applications.
They also said in their plea agreements that they knowingly certified all the information in the applications and supporting documents were true and correct when they knew the information was incorrect. The couple admitted to transferring the $742,926.58 in funds they received through various bank accounts and using the funds for personal expenses.
Mr. Sullivan stated in his plea agreement that he represented on applications that “Oklahoma Paving” had an average monthly payroll of $50,546.41 on April 8, 2020, and “USA-1 Construction” had an average monthly payroll of $143,483.00 on April 30, 2020.
Mrs. Sullivan also stated on their PPP loan applications that she falsely represented that “U.S. Central Construction” had an average monthly payroll of $26,053.00 on April 28, 2020. She also stated that “Oklahoma Energy” had an average monthly payroll of $279,101.66 on May 4, 2020. Additionally, she also said “Oklahoma Energy” had an average monthly payroll of $251,458.00 on May 11, 2020.
The indictment alleged the couple misrepresented the number of businesses they owned and operated, addresses and locations of the borrowing companies, time during which the borrowing companies, time during which the borrowing companies had purportedly been in operation, number of employees, names and addresses of the employees, monthly payroll amount, wage figures, payroll taxes and representations about how the PPP funds would be allocated.
The couple submitted multiple applications for the same borrowing companies to both banks, without disclosing they were submitting duplicate applications.
“These pleadings demonstrate that those who defraud the federal government of pandemic relief funds will be vigorously pursued and held accountable for their actions,” said Cory Nootnagel, Acting Special Agent in Charge, Western Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and Bureau of Consumer Financial Protection.
The SBA Office of Inspector General, Board of Governors of the Federal Reserve System and Bureau of Consumer Financial Protection Office of Inspector General; U.S. Department of Treasury Inspector General for Tax Administration; and FBI conducted the investigation. Assistant U.S. Attorneys Cymetra M. Williams and Matthew Feeley are prosecuting the case.
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