A Lebanon man was arrested by the FBI on Thursday and is facing federal charges after he and a co-defendant allegedly pocketed millions of dollars through a fraudulent scheme to obtain COVID-19 relief funding.
Andrew Aaron Lloyd, 50, of Lebanon, and Russell A. Schort, 38, of Myrtle Creek, have been charged with wire fraud, bank fraud and money laundering, according to a news release from the U.S. Attorney’s Office in Oregon.
Lloyd is scheduled to make his initial appearance in U.S. District Court in Eugene on Friday. Schort was arrested on Wednesday and appeared in federal court the same day.
The duo took advantage of economic assistance programs administered by the Small Business Administration, including economic injury disaster loans and the Paycheck Protection Program, as authorized by the Coronavirus Aid, Relief and Economic Security Act, the news release states.
The CARES Act, signed into law on March 27, was designed to provide emergency financial assistance to millions of Americans and small businesses suffering the economic effects of the COVID-19 pandemic.
According to the complaint, the FBI began investigating Lloyd and Schort after discovering suspicious financial transactions indicating that the pair may have fraudulently obtained PPP loans. A review of bank records revealed that between April 7 and May 8, Lloyd and Schort applied for and received at least three PPP loan payments, totaling more than $2.2 million, using three separate business entities. The loan application packages included some of the same information across the different entities, including the businesses’ physical locations and the names of several dozen employees, the news release states, the U.S. Attorney's Office said.
After receiving the funds, Lloyd allegedly transferred at least $1.8 million to a personal online brokerage account and purchased various securities. In the months that followed, these investments substantially increased in value. On the date of the seizure, the securities purchased with the fraud proceeds, and with a loan secured by equities purchased with fraud proceeds, were valued at more than $10 million, according to the news release.
The FBI’s investigation was assisted by the Small Business Association and the IRS.