Luzerne County Woman Sentenced To 10 Months Imprisonment For Preparing And Submitting Numerous False Economic Injury Disaster Loan (EIDL) Applications In Covid-19 Fraud Scheme
WILLIAMSPORT- The United States Attorney’s Office for the Middle District of Pennsylvania announced that Hayes D. Horner, Jr., age 67, of Berwick, Pennsylvania, pleaded guilty to committing wire fraud in a scheme to obtain and attempt to obtain over $400,000 in COVID-19 relief guaranteed by the Small Business Administration through the Economic Injury Disaster Loan (EIDL) program. Horner pleaded guilty before Chief District Court Judge Matthew W. Brann on October 18, 2021, and was released pending sentencing.
The EIDL program is designed to help small businesses facing financial difficulties during the COVID-19 pandemic. Funded by the March 2020 CARES Act, EIDL funds are offered in low-interest rate loans, designated for specific business expenses, such as fixed debts, payroll, and business obligation.
According to Acting U.S. Attorney Bruce D. Brandler, Horner pleaded guilty to aiding his coconspirators in obtaining and attempting to obtain over $400,000 in EIDL funds by opening two bank accounts that received EIDL funds obtained pursuant to fraudulent loan applications made in the names of identity theft victims. Horner allegedly withdrew over $58,000 in fraudulently obtained EIDL funds, and attempted unsuccessfully to wire approximately $165,000 in fraudulently obtained EIDL funds to other accounts under his coconspirators’ control.
Investigators seized over $100,000 in fraudulently obtained EIDL funds from a bank account under Horner’s control. As part of his guilty plea, Horner agreed to forfeit those seized funds, and to repay nearly $160,000 in restitution.
“COVID-19 relief fraud is a high priority for the Department of Justice and our office will continue to vigorously investigate and prosecute these offenses,” stated Acting United States Attorney Bruce D. Brandler. “These funds were intended to help people and businesses harmed by the pandemic, not to line the pockets of fraudsters. We will do everything in our power to make sure that individuals involved in this type of criminal behavior are prosecuted to the fullest extent the law allows.”
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Phillip J. Caraballo is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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