DENVER — A Morrison man was sentenced to 46 months in federal prison for wire fraud and money laundering after he got two Paycheck Protection Program (PPP) loans during the COVID-19 pandemic. Richard Nieto, 39, applied for three fraudulent PPP loan applications, seeking a total of $1,117,903.56.
Two of his three loan applications went through, totaling $913,551.88, according to the U.S. Attorney's Office for the District of Colorado (USACO). Nieto was ordered to pay $962,438.85 in restitution.
While he committed to using the PPP loans on business expenses, Nieto put it toward personal expenditures and investments, the USACO said. He paid a home mortgage, purchased bitcoin, contributed to an investment account, bought gold and silver coins and invested in a friend's startup business.
“This is another case of someone using for personal gain a program meant to help people suffering during the COVID-19 pandemic,” Acting United States Attorney J. Bishop Grewell said. “I want the public to know that we are aggressively prosecuting people who stole from this relief program.”
Prior to any payments on the loans, Nieto requested loan forgiveness, according to the USACO. He created 87 fake payroll checks and paystubs, related to a specific pay period and employee. Nieto said his companies withheld taxes so they would qualify for loan forgiveness. And one of his PPP loans was fully forgiven.
“Mr. Nieto went to great lengths to abuse a program meant for hardworking small business owners, seeking only to enrich himself.” Special Agent in Charge of the IRS-CI Denver Field Office Amanda Prestegard said.
In his first loan application, Nieto inflated the number of employees and average monthly payroll for his business, Denver Pro Painting & Contracting, the USACO said.
In his second application, Nieto requested a loan for another business — DenPro — that had no payroll or employees and was not operating, according to the USACO. Nieto fabricated $1,771,601.04 in annual payroll in his fourth quarter tax returns.
The USACO announced in January it was investigating dozens of COVID-19 fraud cases, worth roughly $75 million. Last month, two Colorado residents were indicted last month for allegedly defrauding the U.S. government of nearly $1 million in COVID-19 relief funds.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form.
Related coverage:
- Two Colorado residents indicted for allegedly defrauding US of nearly $1 million in COVID-19 relief funds
- U.S Attorney's Office in Colorado investigating dozens of fake COVID-19 claims, worth roughly $75 million
- Someone took out a PPP loan in a Denver man's name, now he's worried about his credit
- Woman accused of fraudulently collecting more than $800,000 via PPP, SBA loans
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