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Press Release

Commerce Township Resident Charged In COVID-19 Loan Fraud Scheme

For Immediate Release
U.S. Attorney's Office, Eastern District of Michigan

DETROIT - A Commerce Township resident was charged with wire fraud in a criminal complaint for his alleged role in a scheme to obtain $963,000 from pandemic loan programs for fictitious businesses, announced United States Attorney Dawn N. Ison.

Joining in the announcement was Angie M. Salazar, Special Agent in Charge of Homeland Security Investigations, Detroit Field Division.

Charged is Ryan Carruthers, 42, of Commerce Township, Michigan. According to the complaint, beginning in approximately April 2020 and continuing through April 2021, Carruthers applied for 14 loans in the names of various businesses from lenders participating in the Paycheck Protection Program (PPP). The PPP was a program overseen by the Small Business Administration (SBA) in which participating lenders provided loans to help businesses keep their workforces employed during the Covid-19 crisis. The SBA would forgive the loans if all employees were kept on the payroll for eight weeks, and the money from the loans was used for payroll, rent, mortgage interest, or utilities. PPP loans were funded by participating banks or lending institutions. Carruthers is also alleged to have applied for a 15th loan pursuant to the Economic Injury Disaster Loan program, a program in which the SBA provided direct loans to businesses adversely affected by the pandemic. 

The complaint also alleges Carruthers’s businesses were fictitious, and the applications he submitted for these pandemic relief loans fraudulent. Carruthers claimed that his various businesses, with names like “Cobra Kai Karate” and “Pure Juice Bar & Café,” had between three and fifteen employees. The complaint states that there is no evidence that any of these businesses had actual employees. Many of the businesses were not even incorporated until after March 2020, which would have rendered them ineligible for PPP loans.   

The complaint further alleges that Carruthers applied for approximately $963,000 across 15 loans under these programs. Thirteen of the loans were actually funded, resulting in disbursements of approximately $851,000 on those loans. Carruthers is alleged to have used loan proceeds to pay off the balance of the mortgage on his home (approximately $251,000) and to have purchased a Sea-Doo personal watercraft, among other things.

United States Attorney Ison stated, “Mr. Carruthers is charged with lying repeatedly to obtain loan funds intended to help businesses keep their doors open during the Covid-19 pandemic. My office is committed to prosecuting anyone who exploited our national crisis to enrich themselves, and today’s charges are a reflection of that commitment.” 

“Our communities suffered during the pandemic, yet some sought to line their own pockets at the expense of the American taxpayer,” said Angie M. Salazar, HSI Detroit Special Agent in Charge. “Our agents will continue to investigate PPP fraud and help hold these offenders accountable to the American people.”

A complaint is only a charge and is not evidence of guilt.  Trial cannot be held on felony charges in a complaint.  When the investigation is completed, a determination will be made whether to seek a felony indictment.  A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Carruthers faces up to twenty years in prison on the wire fraud charge. 

The case is being prosecuted by Assistant United States Attorney John K. Neal. The investigation is being conducted by Homeland Security Investigations.

Updated February 3, 2023