Businessman pleads guilty to paycheck protection program fraud

 

Date: December 9, 2020

Contact: newsroom@ci.irs.gov

Norfolk, VA - A Virginia Beach man pleaded guilty today to bank fraud by submitting a fraudulent application for a Paycheck Protection Program (PPP) loan, and then using the loan proceeds for his own personal benefit including making large cash withdrawals and travel to Las Vegas. Kelly R. Jackson, Special Agent in Charge of the Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI) made the announcement.

According to court documents, Scott Suber submitted to Celtic Bank a fraudulent application for a loan under the PPP, a program instituted by Congress in an effort to help businesses affected by the COVID-19 pandemic continue to pay salary or wages to their employees. In the application, it was falsely represented that Suber's business, Debris or Not Debris Property Preservation, Inc., had eight employees and an average monthly payroll of $140,000. In support of the fraudulent application, a false Form 941, Employer's Quarterly Federal Tax Return was submitted, claiming that the business had quarterly wages of $420,000 and federal tax withholding of $36,620. These figures were completely false and fabricated. In addition, Suber submitted a bank statement with an altered date in support of the application.

Celtic Bank approved and funded a PPP loan for the business in the amount of $350,000 and transferred the funds to an account Suber maintained in the name of Debris or Not Debris Property Preservation, Inc. at Wells Fargo Bank. In the loan application, it was stated that Debris or Not Debris Property Preservation, Inc. would use the loan proceeds for business related purposes, such as the costs of payroll, lease, and utilities. Instead, Suber used the proceeds for his own personal benefit, including making large cash withdrawals and travel to Las Vegas, and making non-business related payments to a number of individuals.

Suber is scheduled to be sentenced on May 4, 2021. He faces a maximum penalty of 30 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

U.S. Magistrate Judge Lawrence R. Leonard accepted the plea. Assistant U.S. Attorney Alan M. Salsbury is prosecuting the case.