Head of veterans charity pleads guilty to buying vintage Jaguar, Rolex watch with PPP funds
A Jacksonville man who ran businesses including a charity for families of soldiers killed in Iraq and Afghanistan has pleaded guilty to fraud and money laundering involving COVID-era paycheck protection loans, prosecutors reported.
Kenneth S. Landers, 57, has agreed to surrender $910,000 the U.S. Justice Department called proceeds of wire fraud as well as a home and a business the government said the fraud funded, the U.S. Attorney’s Office said in a release.
Landers also faces the potential for a prison sentence as long as 30 years, although no sentencing has been scheduled yet.
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Landers, founder and longtime president of a nonprofit called the The American Fallen Veteran Service Project Inc., was charged last month with the two crimes, which the government said stemmed from 10 Paycheck Protection Program loans totaling $1.4 million he applied for on behalf of four businesses he ran.
Seven loans were eventually approved.
The federally backed loans, issued through private lenders, were created by Congress during the early months of the COVID-19 pandemic as a way for businesses to meet payroll and other basic expenses while millions of people were home because of public health orders.
The loans were written to be forgivable if borrowers followed a series of rules, prompting some people to talk about the advances as “free money.”
But prosecutors said Landers broke the law while he chased loans, using bogus paperwork to convince one lender the veteran service charity had spent $960,000 on its employees the year before the pandemic began.
The loan application included a form that employers are supposed to file with the Internal Revenue Service, but prosecutors claimed in January that the IRS hadn’t received that form from the charity for 2019 or some other years.
That lender advanced $200,000 to Landers, prosecutors said in court filings, and a lot was quickly used in ways the paycheck-protection program didn’t allow.
The same day the loan reached the bank, prosecutors had contended, Landers wired $87,000 from the previously-empty account to a car dealer for a 1970 Jaguar JKE Roadster, a classic collectable car.
Prosecutors said money from various loans was eventually used to buy an 18-karat gold Rolex and pay off mortgages on a home in Clifton and a business on North Main Street that housed Tire Empire, one of his companies.
“The proceeds of a PPP loan were not permitted to be used by the borrowers to purchase consumer goods, automobiles, personal residences, clothing, jewelry,” or other personal expenses, prosecutors wrote in a court filing in January.
The U.S. Small Business Administration's inspector general reported last year that PPP involved "an unprecedented level of fraud activity" and described 70,000 loans totaling $4.6 billion as "potentially fraudulent."
The release from prosecutors said the Justice Department "remains vigilant" in investigating and prosecuting crimes involving COVID relief.
This article originally appeared on Florida Times-Union: Jacksonville man loses $910K, plus real estate, over COVID loan fraud
