Utah County man sentenced for fraud in Paycheck Protection Program loan

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LEHI, Utah, Jan. 19, 2022 (Gephardt Daily) — Lehi resident Michael Leroi Douros has been sentenced to 28 months in prison after pleading guilty to fraud connected to a Paycheck Protection Program loan.

Douros, 66, pleaded guilty to two counts of bank fraud, two counts of making a false statement to a bank, and money laundering contained in the felony information with which Douros was charged in federal court, says a statement issued by the Department of Justice, District of Utah.

After being released from prison, Douros will serve three years of supervised release, the statement says.

According to court documents filed as a part of his plea agreement, Douros made false representations to two banks, for a total amount of $437,891, to get a PPP loan for his business, Epic Rentals UT LLC. The business was registered with the Utah Division of Corporations on June 5, 2019, with his son listed as the registered agent.

The false statements included in the loan applications related to (1) misrepresentations about Epic Rentals’ monthly payroll and the number of employees the business had; (2) claims that his son owned 50 percent of Epic Rentals when his son was a straw owner and did not own any portion of the business when at least one application was submitted; and (3) a failure to disclose on the loan application that he had been convicted of a felony in Utah and had been on probation in the last five years.

PPP loan applications make clear that any company which was owned 20% or more by someone with such criminal history was disqualified from receiving PPP funds. Based on Douros’ criminal history, and the fact that he was still on probation when the loan applications were submitted, his business was ineligible for PPP funding.

Douros first submitted an application with false statements through Zions Bank. Zions Bank initially funded the PPP loan of $198,000 to Epic Rentals, the Department of Justice statement says. However, upon further inspection of the representations in the loan application, the bank cancelled the loan transfer.

Douros then submitted a second PPP loan application containing false statements through Cache Valley Bank, which was funded in the amount of $239,091.67 to Epic Rentals.

The money laundering conviction relates to a $20,000 payroll check made payable to the defendant from an Epic Rentals bank account.

“This prosecution highlights the serious penalties that can be imposed on anyone who attempts to defraud the federal government out of Paycheck Protection Program funding meant for honest and hardworking small businesses,” said United States Attorney Andrea T. Martinez in a prepared statement.

“The District of Utah takes all Paycheck Protection Program fraud seriously and will aggressively prosecute anyone who attempts to defraud the United States Government out of this funding which Congress has made available for small businesses.”

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