CARLISLE, Pa. — The owner of a trucking company in Carlisle is facing federal wire fraud and money laundering charges after he allegedly received more than $467,000 in fraudulent COVID-19 relief funds, U.S. Attorney Bruce D. Brandler announced.
Keith McConnell, 43, owner of KB Transportation LLC, is accused of submitting $467,200 in fraudulent Paycheck Protection Program claims, Brandler said.
The PPP was designed to help small businesses facing financial difficulties during the COVID-19 pandemic, Brandler said. 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.
According to Brandler, McConnell submitted fraudulent PPP loan applications and forged documents on behalf of his company, which was not in business, had no employees, and had no payroll expenses.
On June 5, 2020, McConnell falsely certified that KB Transportation LLC employed twenty-six employees and had monthly payroll expenses totaling $124,800, Brandler said.
As a result of the fraud, McConnell received $312,000.00 in PPP loan proceeds, according to Brandler.
Within weeks, Brandler alleges, McConnell and his co-conspirators spent the PPP funds on unauthorized expenditures including the purchase of a residential property, two vehicles, and stock market investments.
On January 20, McConnell used KB Transportation LLC to apply for a second PPP loan in the amount of $155,200.00, and again submitted false and fraudulent loan applications and documents, Brandler said.
The second PPP loan was never disbursed.
“Covid relief fraud is a high priority for our office and the Department of Justice,” Brandler said. “These funds were meant to help small businesses survive the pandemic not for fraudsters to support an opulent lifestyle. Our Covid Relief Fraud Task Force will continue to investigate all credible allegations of covid fraud and prosecute any individuals who may have abused this program.”
