Skip to main content
Press Release

Yakima Resident Sentenced to 15 Months in Federal Prison for COVID-19 Relief Fraud

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

Yakima, Washington – Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced today that Karla Padilla, age 49, of Yakima, Washington, was sentenced to 15 months in federal prison for fraudulently obtaining more than $290,000 in COVID-19 relief funds. United States District Judge Mary K. Dimke announced the sentence, the most recent obtained by the COVID-19 Relief Fraud Strike Force Strike Force.

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 government-backed funding to small businesses which could be forgiven so long as the proceeds were used for payroll and other eligible expenses. Another program, the Economic Injury Disaster Loan (EIDL) program, provided low interest loans that could be deferred until the conclusion of the pandemic to provide “bridge” funding for small businesses to maintain their operations during shutdowns and other economic circumstances caused by the pandemic. The PPP and EIDL programs have provided billions of dollars in aid, the vast majority of which have not been paid back, including hundreds of millions of dollars disbursed within Eastern Washington.

“COVID-19 relief programs were designed to lift up our community during crisis, and due to the number of people and businesses that requested funding, some deserving small businesses were not able to obtain funding to keep their businesses in operation,” said U.S. Attorney Waldref. “We created the Eastern Washington COVID-19 Fraud Strike Force because combatting pandemic-related fraud and holding those accountable who abused these programs is critical to the strength and safety of our community in Eastern Washington. 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. Today’s sentence represents the most significant period of custody imposed in our district for pandemic-related fraud. I am especially grateful to Special Assistant United States Attorney Frieda K. Zimmerman, as well as Assistant United States Attorneys Dan Fruchter, Tyler Tornabene, and Brian Donovan for their work ensuring fraudsters are held accountable for their crimes.” 

In February 2022, U.S. Attorney Waldref and the U.S. Attorney’s Office (USAO) began working with federal law enforcement agencies to create and launch a COVID-19 Fraud Strike Force that would leverage partnerships between different agencies to aggressively investigate and prosecute fraud against COVID-19 relief programs in Eastern Washington. The Strike Force consists of agency representatives from the USAO, Small Business Administration (SBA) Office of Inspector General (OIG), Federal Bureau of Investigation (FBI), U.S. Department of the Treasury Inspector General for Tax Administration (TIGTA), U.S. Secret Service, U.S. Homeland Security Investigations, U.S. Department of Veterans Affairs OIG, General Services Administration OIG, Department of Homeland Security (DHS) OIG, Internal Revenue Service,
Department of Energy OIG, and others.

According to court documents and information disclosed during court proceedings, Padilla fraudulently obtained hundreds of thousands of dollars in PPP and EIDL funding for her purported collectible car business, Queen B Collectibles, and for other purported businesses owned by Padilla. As Padilla admitted during court proceedings and in her plea agreement, Queen B Collectibles was not an active business as of February 2020, and therefore was not eligible for any PPP or EIDL funding. As part of her sentence, Padilla will serve 15 months in federal prison and three years of supervised release. The court also sentenced Padilla to pay restitution of $302,145.40, the amount of loss to the United States as the result of the fraud, and an additional fine of $25,000 dollars. Finally, in an addendum to the plea agreement, Padilla agreed to forfeit the proceeds from the sale of a parcel of real property, as the property was derived from proceeds from the fraud.

“This sentence demonstrates that falsifying information to gain access to taxpayer dollars will not be overlooked and wrongdoers will be brought to justice,” said SBA OIG’s Western Region Special Agent in Charge Weston King. “I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.

“I commend the stellar investigative work on these cases performed by the Strike Force and especially in this case by SBA OIG, TIGTA, and FBI” said U.S. Attorney Waldref. “We will continue to work together with our law enforcement partners to vigorously prosecute those who abuse and misuse COVID-19 relief funding, and to strengthen our communities by protecting our small and local businesses.”

This case was investigated by the Eastern District of Washington COVID-19 Fraud Strike Force and by the SBA OIG, TIGTA, and FBI. Special Assistant United States Attorney Frieda K. Zimmerman and Assistant United States Attorneys Dan Fruchter, Tyler Tornabene, and Brian M. Donovan prosecuted this case on behalf of the United States.

Case No. 1:22-CR-2059-MKD


Richard Barker 
Assistant United States Attorney and Public Affairs Officer
509-835-6311 or

Updated May 22, 2023

Disaster Fraud
Financial Fraud