He had fake workers. She wanted loans forgiven. What Idaho COVID-relief fraudsters did
Three Treasure Valley residents have been found guilty of fraudulently taking taxpayer money from federal COVID-19 relief programs intended to keep workers paid and businesses alive. Several others were also convicted.
Idaho’s top federal prosecutor, U.S. Attorney Josh Hurwit, created a task force a year ago to investigate abuses of pandemic-era economic aid programs like the Paycheck Protection Program, Economic Injury Disaster Loan, Unemployment Insurance and Coronavirus Food Assistance Program.
Hurwit said in a news release Wednesday that the task force has now criminally charged a dozen defendants and obtained civil judgments against three others. The amount of fraud involved in the cases is over $7 million, he said.
According to the release, among those convicted are:
1. The jeweler with no employees
Lawrence Sikutwa, 43, of Boise, who was found guilty of bank fraud and money laundering.
He filed three fraudulent applications and obtained nearly $338,000 in Paycheck Protection Program loans from two banks — Idaho Central Credit Union and Key Bank — using the birth dates, Social Security numbers and names of two people he knew, according to court documents. Sikutwa used the money for personal and non-business related expenses and transferred more than $190,000 of it to offshore accounts, the release said.
One of the applications was on behalf of a purported Boise jewelry company named Vatugem. The application claimed Vatugem had eight employees and an average monthly payroll of $63,191. In fact, Vatugem had no employees, payroll expenses or leases, according to the indictment.
He was sentenced on Sept. 25 to 30 months in prison and five years of supervised release. He was also ordered to pay $157,976 in restitution to Idaho Central Credit Union, $180,000 to Key Bank and $26,916 to the Small Business Administration.
In 2013, when Sikutwa was 34, he was found guilty of submitting false tax returns for a refund, according to a news release at the time from Idaho’s U.S. Attorney’s Office. Federal judge Lynn Winmill sentenced him to 21 months in prison and three years of supervised release. Sikutwa was also ordered to pay $1.47 million in restitution to the Internal Revenue Service.
2. The homebuilder who made up workers
Valentin Lapatskiy, 34, of Meridian, was convicted of wire fraud.
He filed fraudulent applications for two businesses and obtained $300,000 from the Economic Injury Disaster Loan program by making false claims regarding the businesses’ gross revenues, cost of goods sold and employees.
Lapatskiy is the president of Valdi Homes, a Meridian construction company, according to the Idaho Secretary of State’s website. The release said he also made fraudulent claims about a limousine company in his wife’s name.
One of the applications claimed Valdi Homes opened in November 2017 and had four employees with gross revenues of $477,000 in 2019. However, Valdi Homes was first registered as a company in Idaho in July 2020, when Lapatskiy opened a bank account for the business at Idaho Central Credit Union and applied for an employer identification number, claiming the company did not plan to have any employees the following year, according to the indictment.
He was sentenced on Sept. 26 to 15 months in prison and two years of supervised release. He was also ordered to pay $327,594 in restitution to the Small Business Administration.
3. The business owner who wanted her loans forgiven
Patricia Pischel, 38, of Star, pleaded guilty to wire fraud.
She made false claims about three businesses to obtain five loans under the Paycheck Protection Program and Economic Injury Disaster Loan program, adding up to $219,409. The fraudulent claims include misrepresenting the number of employees, monthly payroll and wage information included in purported Internal Revenue Service forms. Pischel’s sentencing is set for Nov. 15.
A court order regarding the forfeiture of property in her case indicates she’ll have to pay at least $126,584 in restitution.
Pischel owns Rustic Farmhouse, based in Star. She also owned a business called Rekkd Threads, but it was dissolved nearly a year ago, according to the Idaho Secretary of State’s website.
In an application for a Paycheck Protection Program loan, she falsely claimed that the Rustic Farmhouse had an average monthly payroll of $5,440. She received a $13,600 loan and later requested it be forgiven, saying that the money had been used for payroll and other eligible expenses, according to the indictment.
The supposed Internal Revenue Service forms she submitted with the application had never been filed with the agency, and they contained incorrect information regarding total income, salaries and wages for the business.
Another loan application Pischel submitted falsely claimed Rekkd Threads was established in April 2019 and had 17 employees with an average monthly payroll of $39,726. According to the Idaho Secretary of State’s website, the business was established in June 2020. She received a $99,315 loan and again requested it be forgiven.
“We will not rest until we have done everything in our power to seek justice against those who took advantage of the COVID-19 pandemic to line their pockets through fraud,” Hurwit said.
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