CARLISLE, Pa. — The owner of a Cumberland County trucking business will serve up to 18 months in prison for his role in a wire fraud and money laundering scheme that netted him $467,200 in COVID-19 relief funds guaranteed by the U.S. Small Business Administration through the Paycheck Protection Program, according to U.S. Attorney John C. Gurganus.
Keith McConnell, 43, of Carlisle, was sentenced Tuesday by U.S. District Court Judge Christopher C. Conner, Gurganus said. In addition to his prison time, McConnell was ordered to serve three years of supervised release following incarceration, and to pay $312,200 in restitution for disbursement to the victims of his crimes.
To date, McConnell has paid back $237,515.50 in restitution, Gurganus said.
The PPP was designed to help small businesses facing financial difficulties during the COVID-19 pandemic, according to Gurganus. Funded by the March 27, 2020 Coronavirus Aid, Relief and Economic Security (CARES) Act, PPP funds were offered in forgivable loans to small businesses for employee job retention and certain other expenses.
PPP loan amounts were determined by the number of employees and average monthly payroll costs. Gurganus said McConnell submitted fraudulent PPP loan applications and forged documents on behalf of his company, KB Transportation LLC.
In both 2019 and 2020, KB Transportation LLC was not in business, had no employees, and had no payroll expenses, Gurganus said.
On June 5, 2020, however, McConnell falsely certified that KB Transportation LLC employed twenty-six employees and had monthly payroll expenses totaling $124,800.
As a result of the fraud, McConnell received $312,000 in PPP loan proceeds, according to Gurganus.
Within weeks, McConnell spent the PPP funds on unauthorized expenditures including the purchase of a home, two personal vehicles, cash withdrawals, and stock market investments, Gurganus said.
On January 20, 2021, McConnell again used KB Transportation LLC to apply for a second PPP loan in the amount of $155,200, and again submitted false and fraudulent loan applications and documents, according to Gurganus.
The second PPP loan was never disbursed, he said.
The case was investigated by the Internal Revenue Service-Criminal Investigation.
Assistant U.S. Attorney Samuel S. Dalke prosecuted the case.
