Kennewick Business Owner Agrees to Pay $107,534 to Resolve False Claims Act Liability in Connection with COVID Relief Fraud

Richland, WA – A Kennewick business owner has agreed to pay $107,534 to resolve False Claims Act claims that he misused COVID-19 relief funding to purchase a personal recreational vehicle,  announced Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington.  This civil settlement is the most recent result announced by the Eastern Washington COVID-19 Fraud Strike Force launched by the U.S. Attorney’s Office last year. 

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  The CARES Act provided a number of programs through which eligible small businesses could request and obtain relief funding intended to mitigate the economic impacts of the pandemic for small and local businesses.  One such program, the Paycheck Protection Program (PPP), provided forgivable loans to eligible small businesses to retain jobs and maintain payroll during the pandemic.  Another program, the Economic Injury Disaster Loan (EIDL) program, provided low-interest bridge funding to support businesses endangered by the pandemic. 

Since being launched in March 2022, the Eastern Washington COVID Strike Force has charged approximately 20 individuals, obtained ten criminal felony fraud convictions, and recovered millions of dollars in misspent funds, fines, and penalties. 

“COVID-19 relief programs quickly ran out of money due to the number of businesses that requested funding, meaning that struggling, deserving small businesses were not able to obtain critically needed funding to keep their businesses afloat during the shutdowns and disruptions caused by the COVID pandemic,” said U.S. Attorney Waldref.  “We created the Eastern Washington COVID-19 Fraud Strike Force because it is critical to the strength and safety of our communities that we all work together to combat pandemic-related fraud and bring much-needed accountability to these programs.  The Strike Force works to ensure that limited resources are used to protect our local small businesses and the critical jobs and services that they provide for the community.” 

In the settlement announced today, Benjamin D. Castilla, the owner of Columbia Basin Netwerks, a Kennewick-based IT services business, admitted that he received PPP and EIDL funding for his business.  Castilla admitted that, while he used some of the funding he received for legitimate business purposes, he also used $107,534 to purchase a recreational vehicle (RV) for his personal use.  In addition to paying $107,534, Castilla agreed through the settlement to timely repay all of the CARES Act loan funding that he received. 

“I’d like to recognize the stellar investigative work done by the Small Business Administration, Office of Inspector General, on this case,” continued U.S. Attorney Waldref.  “We will continue to work closely with the Strike Force and with our law enforcement partners to protect our communities and bring accountability for those who take advantage of vital public programs.” 

“Those who misuse SBA pandemic funds for personal gain will be held accountable,” said Special Agent in Charge Weston King of SBA’s OIG Western Region.  “I want to thank the U.S. Attorney’s Office and our law enforcement partners for their support and dedication to pursuing justice in this case.” 

The cases were investigated by the Eastern Washington COVID Fraud Strike Force, and in particular by the Small Business Administration OIG, Western Region.  Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene prosecuted this case on behalf of the United States.