James Baldwin II got 30 days in federal prison and a bill for $1,007,223. Kurt Ly pleaded guilty in a separate case. Both men run businesses in Morgantown, West Virginia, and both were caught up in a pandemic-relief fraud sweep that prosecutors put at more than $245 million in intended losses.
The U.S. Attorney’s Office for the Northern District of West Virginia announced the two cases, according to WDTV and WAJR. They belong to “Operation No Doze,” a summer takedown run by the Department of Justice, the Small Business Administration and the SBA’s Office of Inspector General. It covered 40 federal districts, and over two months it produced enforcement actions against more than 160 criminal defendants.
Select Decks owner gets prison time
Baldwin, 46, owns Select Decks. Prosecutors said he applied for and received $738,230 in Paycheck Protection Program loans from several banks. To get them, he falsified loan documents, both for Select Decks and for three other businesses that did not exist before the pandemic. The SBA then forgave the loans in full.
There was a tax case on top. Investigators found that from 2016 on, Baldwin took $258,993 in employment taxes out of his employees’ paychecks and issued W-2s showing the deductions. He never filed the required tax forms and never sent the money to the IRS. Along with the 30-day sentence, the court ordered the $1,007,223 in restitution.
Vin Phat owner pleads guilty
Ly, 69, owns and operates Vin Phat, Inc. He pleaded guilty to a scheme to defraud pandemic relief programs. Prosecutors said he spent PPP money on expenses the program did not allow, then told the SBA the funds had been used properly so the loans would be forgiven.
He also took out a $146,600 Economic Injury Disaster Loan in August 2020, money meant only for business working capital. Investigators said he spent it on personal items instead: a $15,000 car payment, transfers to a personal bank account and cryptocurrency investments.
U.S. Attorney Matthew Harvey said in the announcement: “These defendants deliberately stole from programs funded by American taxpayers and intended to support legitimate small businesses.” He added that his office “will aggressively pursue those who misuse federal funds and will hold accountable anyone who attempts to defraud the United States.”
Sources
- 2 Morgantown business owners appear in court in $245M nationwide COVID loan fraud sweep
- Morgantown business owners sentenced for federal fraud – WAJR
