BALTIMORE, MD—A Baltimore County businessman has been sentenced to a year and a day in federal prison after pleading guilty to fraudulently obtaining more than $1.3 million in Paycheck Protection Program loans, authorities say.
David Epstein, 46, of Owings Mills, submitted fraudulent loan applications for his business, PEI Staffing, a temporary staffing company, through the CARES Act, according to the U.S. State’s Attorney’s Office.
The CARES Act was created in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. It offered forgivable loans to small businesses for job retention and other expenses. The Small Business Administration’s Paycheck Protection Program (PPP) helped businesses meet their financial obligations.
In April 2020, Epstein submitted a false PPP loan application in the name of PEI, requesting approximately $1,307,170 in funds, according to authorities. The application contained inaccurate statements about the number of employees at PEI, wages paid to employees, and how the funds would be used, officials said. For example, PEI claimed to employ 382 workers but only listed 79 on an IRS Form 941 for Q2 2020.
Epstein also submitted a fictitious SunTrust Bank statement, claiming the account belonged to PEI, but was actually connected to another business he managed, Stafquik, according to authorities.
The loan money was eventually deposited into the SunTrust Stafquik account, and within four days, Epstein opened four personal bank accounts at two separate banks, authorities said.
He immediately began transferring the PPP loan money into the new accounts, and used the funds for impermissible personal expenses, according to officials.
Within a day of receiving the funds, Epstein transferred $110,356.48 to Mercedes-Benz Financial for a 2019 Mercedes-Benz GT43C4 automobile that he previously purchased, authorities said.
In May-August 2020, Epstein diverted around $138,522 in PPP funds to a contractor for his home renovations, including a pool.
He admitted to using PPP funds for a $100,000 settlement, a $344,341.05 debt, a luxury golf resort trip, and other personal expenses, authorities said.
In addition, Epstein repeatedly tried to add individuals he owed money to PEI’s payroll to make it appear that they were employees, and attempted to hide the PPP loan amount he received from family members, PEI employees, and various business partners he owed money, according to officials.
After serving his time in federal prison, Epstein will be required to complete 12 months of home incarceration.
This article was written with the assistance of AI and reviewed by a human editor.
Photo via Pixabay
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