SACRAMENTO, Calif. — Aaron Ashcraft, 42, of Sacramento, was sentenced today to three years and five months in prison after pleading guilty to carrying out a scheme to defraud the Paycheck Protection Program of over $1.2 million in COVID-19 relief loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, U.S. Attorney Phillip A. Talbert announced.
According to court documents, between May 2020 and April 2021, Ashcraft submitted to lenders approved by the SBA at least seven fraudulent Paycheck Protection Program loan applications in the names of purported businesses. In the applications, Ashcraft falsely represented that each of the purported businesses had employees and monthly payroll expenses. To support the loan applications, Ashcraft submitted fabricated records, including IRS forms, checking account statements, and payroll summaries. In total, Ashcraft requested over $1.2 million in Paycheck Protection Program loans and obtained approximately $920,000.
In addition to Paycheck Protection Program fraud, Ashcraft admitted that, from September 2017 through June 2020, he embezzled at least approximately $780,000 from his former employer—a street-sweeping company in Sacramento. Ashcraft held multiple positions at the company, including chief financial officer. As chief financial officer, Ashcraft had access to the company’s business credit card accounts. Without authorization, Ashcraft used those accounts to pay for personal expenses.
Finally, Ashcraft admitted to defrauding the Maine Department of Labor. According to his plea agreement, in July 2020, Ashcraft applied for Pandemic Unemployment Assistance, falsely claiming that he lived in Maine and was unable to work due to COVID-19. To support his application, Ashcraft submitted falsified IRS forms in which he represented that, in 2019, he operated a business in Maine that received over $160,000 in income and made a net profit of more than $66,000. In total, Ashcraft fraudulently obtained unemployment compensation of more than $58,000.
As part of his sentence, Ashcraft was ordered to pay restitution as follows: a total of $919,598 to three SBA-approved lenders; $45,979 to the SBA; $779,832 to his former employer; and $58,050 to the Maine Department of Labor.
This case was the product of an investigation by the Federal Bureau of Investigation, the Federal Deposit Insurance Corporation Office of Inspector General, and the Small Business Administration Office of Inspector General. Assistant U.S. Attorney Matthew Thuesen prosecuted the case.