LACOMBE MAN SENTENCED IN CONNECTION WITH HURRICANE KATRINA FRAUD
KEITH STOBAUGH, 53, a resident of Lacombe, Louisiana, was sentenced today in federal court in front of U.S. District Judge Sarah S. Vance to three (3) years probation for one count of misprision of a felony in connection with a Small Business Administration disaster loan obtained by he and his co-defendant in the aftermath of Hurricane Katrina, announced U.S. Attorney Jim Letten. In addition, Judge Vance ordered the defendant to pay a fine in the amount of $1,500.
According to court documents, in 2005, the defendants, KEITH STOBAUGH and his wife and co-defendant, DENISE STOBAUGH, applied for a low interest disaster relief loan from the United States Small Business Administration (SBA) based on damage purportedly suffered by their home as a result of Hurricane Katrina. Based on the application and representations about the damage, the SBA granted the defendants a low interest disaster loan of $38,800 in governmental funds.
Additionally, court documents reflect that in 2006, the defendant, DENISE STOBAUGH, applied for financial assistance from the Louisiana Road Home Program for the same purported damage their house suffered as a result of Hurricane Katrina. Based upon her application and representations, the LRHP approved an award of $150,000 in funds belonging to the United States Department of Housing and Urban Development, who administered the program. In reality, according to court documents, the home owned by DENISE and KEITH STOBAUGH suffered very minimal damage from Hurricane Katrina.
On December 17, 2009, both defendants pled guilty to the crimes charged. In the case of DENISE STOBAUGH, she pled guilty to two counts of theft of government funds in connection with the SBA loan and the LRHP grant; KEITH STOBAUGH, pled guilty to one count of misprision of a felony in connection with the SBA loan. Sentencing for DENISE STOBAUGH has been set in front of Judge Vance for July 28, 2010.
The case was investigated by agents from the United States Small Business Administration, Office of Inspector General, and the United States Department of Housing and Urban Development, Office of the Inspector General. The case was being prosecuted by Assistant U. S. Attorney Matt Chester.
