Carlisle trucking business owner charged with COVID-19 relief fraud

Coronavirus

HARRISBURG, Pa. (WHTM) — The U.S. Attorney’s Office for the Middle District of Pennsylvania announced Friday that Keith McConnell, 43, of Carlisle was charged with perpetrating a wire fraud and money laundering scheme with funds from the Paycheck Protection Program (PPP).

McConnell’s scheme consisted of $467,200 in COVID-19 relief funds guaranteed by the U.S. Small Business Administration through the PPP. The PPP was created to help small businesses facing struggles during the hardships of the pandemic. These funds were offered in forgivable loans to small businesses form employee job retention and certain other expenses.

In McConnell’s case, Acting U.S. Attorney Bruce D. Brandler says the criminal information alleges he submitted fraudulent PPP loan applications and forged documents on behalf of his Carlisle business, KB Transportation, which hadn’t been in business in either 2019 or 2020. It also alleges he had no employees or payroll expenses.

Allegations say McConnell falsely certified in June 2020 that KB Transportation, LLC, had 26 employees and had monthly payroll expenses totaling $124,800. He later received $312,000 in PPP loans.

McConnell and his co-conspirators allegedly used the weeks following spending the funds on unauthorized expenses including purchase of residential property, two vehicles, and stock market investments.

In January 2021, McConnell used the business to apply for a second PPP loan for $155,200 with false applications and documents, but that was never disbursed.

“COVID relief fraud is a high priority for our office and the Department of Justice,” Brandler said. “These funds were meant to help small businesses survive the pandemic not for fraudsters to support an opulent lifestyle. Our COVID Relief Fraud Task Force will continue to investigate all credible allegations of COVID fraud and prosecute any individuals who may have abused this program.”

A sentence following a finding of guilt is imposed by the Judge after consideration of applicable statutes. Maximum penalty for the most serious offense is 30 years in prison, a term of supervised release, and a $1 million fine.

The case was investigated by the Internal Revenue Service-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Samuel S. Dalke.

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