Northwood man sentenced for fraudulent PPP claims
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Apr. 17—It's New Hampshire's largest COVID relief-related fraud case — so far.
Northwood resident Joshua Leavitt was sentenced last week in federal court for attempting to illegally obtain more than $6 million in CARES Act funding, primarily by claiming payroll protection dollars for non-existent employees in seven companies he owned.
Leavitt, 41, was sentenced April 10 at U.S. District Court in Concord to 28 months in federal prison, plus two years of supervised release. He was ordered to pay more than $873,000 in restitution.
In September he pleaded guilty to bank and wire fraud, after attempting to siphon emergency relief funds with phony tax returns that could not be verified, according to the U.S. Attorney's Office.
"Leavitt's conduct in this case was egregious," U.S. Attorney Jane E. Young said in a statement.
During the pandemic's aftershocks and emergency measures, overstating the number of employees on company payrolls became a way for businesses and opportunistic owners and partners to attempt to score free dollars — courtesy of U.S. taxpayers — by claiming to be financially threatened by the pandemic's steep drop in commerce, according to the U.S. Department of Justice.
Fraudulent payroll claims became widespread crimes that federal prosecutors across the country are continuing to unravel, DOJ said.
"This type of fraud is rampant, and it's not the only case we've seen," said Assistant U.S. Attorney Alexander S. Chen, who prosecuted the Leavitt case.
Leavitt applied for 35 Paycheck Protection Program and Economic Injury Disaster loans intended for payroll and essential business expenses such as rent and mortgage, some within hours or days of the start of the CARES Act program, Young said.
"It takes a period of time to see the fraud," Young said Friday. "When there are programs, there are people who will take advantage of the programs. These are problematic cases that undermine confidence in the government system. We will continue to prosecute these cases to the full extent of the law."
In a PPP application for his wine company Puro Trader, also known as Yahyn, Leavitt submitted a fake tax return claiming the company payroll exceeded $1 million in 2020, but no such return was ever filed with the IRS.
In an application for a company called Monticello Transnational, Leavitt submitted a phony return claiming the company paid employees nearly $340,000 in the fourth quarter of 2020, when the actual payroll was only $9,000.
The investigation was led by the U.S. Treasury Inspector General for Tax Administration and the U.S. Secret Service, with help from the U.S. Postal Service. It required tracing a maze of fraudulent loan and grant applications — some of which were denied, while others were rubber-stamped by banks tasked with distributing emergency funds without delay.
Dozens of similar cases
While the country "was facing an unprecedented medical crisis" the money was "meant to help people who were truly struggling to keep their businesses afloat, keep their families afloat and keep roofs over their families," Young said.
Almost a dozen such cases are now working through federal court in New Hampshire, and more are expected to follow, she said.
Leavitt did not act alone. In February, his co-defendant and co-conspirator, Pierre Rogers of Irvine, California, was sentenced to 41 months in prison for conspiracy to commit wire and bank fraud.
Together Rogers and Leavitt attempted to steal a combined $6.2 million, which "ultimately denied legitimate business nearly $1 million" in pandemic relief, Young said.
When Congress passed the CARES Act in March 2020, "We relied on businesses and business owners to tell the truth," Chen said. "Those like Leavitt and Rogers egregiously betrayed that trust and violated that trust over and over again."
According to court documents, including sentencing records, Rogers and Leavitt applied for dozens of Paycheck Protection Program and Small Business Administration Economic Injury Disaster loans by inflating the companies' revenues and number of employees and by submitting false supporting documents.
Leavitt's online business Dark Matter Associates was described as "COVID-19 Disaster Relief Loan Acquisition and Management."
Rogers obtained $803,756 in CARES Act money. He used $107,780 to buy a 2011 Rolls Royce Ghost and another $56,000 to purchase a Porsche. He also spent money on clothing and jewelry from luxury retailers, lavish resort stays and high-priced meals.
Leavitt, who tried to obtain $6,019,725.40, received $873,475.50, which he claimed to have used to keep his businesses afloat. But he was never entitled to the money in the first place, according to the sentencing report.
"There is and will continue to be a high price to pay by these fraudsters," Young said.
