Kanawha County Man Pleads Guilty to COVID-19 Relief Fraud Scheme
For Immediate Release
U.S. Attorney's Office, Southern District of West Virginia
CHARLESTON, W.Va. – Calvin Butler, 24, of Dunbar, pleaded guilty today to a scheme to defraud the Paycheck Protection Program (PPP) of $16,040 in COVID-19 relief loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
According to court documents and statements made in court, Butler provided his personal information to an individual he met on the Instagram social media platform who had offered to apply for a PPP loan on Butler’s behalf in exchange for $2,000 of the loan proceeds. On April 25, 2021, this individual electronically submitted an application falsely stating that Butler operated a barbershop and that it had received $77,000 in gross income in 2020. Butler admitted that he knew he was not eligible to receive a PPP loan. Butler further admitted that he proceeded with the scheme because he needed money to pay his bills.
The CARES Act, enacted in March 2020, offered emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic. This assistance included forgivable loans to small businesses for job retention and certain other expenses through the Paycheck Protection Program. Businesses applying for PPP loans had to certify that the business was in operation on February 15, 2020, and were required to provide documentation showing their prior gross income from either 2019 or 2020.
The fraudulent PPP loan application was approved and $16,040 was electronically deposited from a financial institution in Tennessee to Butler’s account with a bank in South Charleston on June 7, 2021. Butler admitted that he knew the deposit was the result of the fraudulent PPP loan application. Butler further admitted that he withdrew and spent $15,000 of the fraudulently obtained money to benefit himself personally and not for any legitimate business expenses.
Butler pleaded guilty to wire fraud and is scheduled to be sentenced on May 18, 2023. Butler faces a maximum penalty of 20 years in prison, three years of supervised release, and a $250,000 fine. Butler also owes $18,540 in restitution.
United States Attorney Will Thompson made the announcement and commended the investigative work of the West Virginia State Police-Bureau of Criminal Investigation (BCI), the West Virginia State Auditor’s Public Integrity and Fraud Unit, and the Litigation Financial Analyst with the U.S. Attorney’s Office.
United States District Judge Joseph R. Goodwin presided over the hearing. Assistant United States Attorney Ryan Blackwell 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 copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:22-cr-161.
Updated April 20, 2023