St. Louis Man Sentenced to 15 Months in Prison for Pandemic Loan Fraud

ST. LOUIS – U.S. District Judge John A. Ross on Thursday sentenced a man who fraudulently obtained $41,484 in loans intended to help struggling businesses during the pandemic to 15 months in prison.

Judge Ross ordered Robert Baines, 44, to repay the amount of the loans, as well as $4,815 to the property management company where he once worked. After Baines pleaded guilty to two felony counts of wire fraud in August, allegations emerged that he told tenants to pay rent directly to him and moved two tenants into vacant apartments without leases and told them to pay him in cash, stealing a total of $7,315. Baines subsequently repaid $2,500 to his former employer.

In his guilty plea in August, Baines admitted fraudulently obtaining Paycheck Protection Program (PPP) loans in 2021. He applied for a first draw PPP loan on March 31, 2021, and a second draw PPP loan on April 9, 2021. In the loan applications, Baines falsely claimed that he was self-employed, lied about his business income and submitted a forged IRS form to bolster his claims. Baines was not self-employed and did not earn any of the claimed self-employment income. In his application for the second-draw loan, Baines falsely claimed that he’d suffered at least a 25% reduction in gross income between 2019 and 2020.

The PPP loans were designed to help small businesses during the COVID-19 pandemic and, accordingly, were to be used for business-related purposes, such as to cover payroll, utilities, and rent or mortgage payments. Instead, Baines instead used the money for restaurants, travel, clothing and other retail items.

The U.S. Secret Service investigated the case. Assistant U.S. Attorney Justin Ladendorf prosecuted the case.