Plainview man gets 15-year sentence in $4 million PPP loan fraud scheme
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A 59-year-old man was sentenced Thursday to 15 years in federal prison after admitting to a $4 million Paycheck Protection Program Loan fraud scheme out of Plainview.
Andrew Travis Johnson appeared with his attorney William McMurrey before U.S. District Judge James Wesley Hendrix for a sentencing hearing in a Lubbock court.
Johnson pleaded guilty in March to three counts of bank fraud, one count of aggravated identity theft and one count of engaging in monetary transactions in property derived from specified unlawful activity.
Each of the first three counts carries a punishment up to 30 years in prison. The aggravated identify theft charge carries a punishment of up to two years in prison and final charge is punishable by up to 10 years in prison.
Hendrix sentenced him to 13 years in prison on the bank fraud charges, two years to the identity theft charge and 10 years for the remaining charge.
Hendrix ordered Johnson to serve the 13 and 10 year sentences at the same time. Once he finishes serving those sentences, he will begin serving the two- year sentence.
Johnson was also ordered to pay about $4.15 million in restitution and to forfeit numerous assets, including multiple luxury cars, according to a release form the U.S. Attorneys Office in the Northern District of Texas.
His charges were filed in the form of an information, and Johnson waived his right for a grand jury indictment.
Johnson's case is the first PPP Loan Fraud investigation arising from the region, according to officials with the U.S. attorney's office.
From April 2020 to April 2021, Johnson fraudulently obtained 27 loans totaling more than $3.8 million from the paycheck protection program. Johnson also obtained forgiveness for the loans, meaning he didn't have to repay them.
The program provided government-backed, low-interest, loans to business owners to allow them to keep their employees during the economic slump caused by the COVID-19 pandemic. The program also allowed the loans to be forgiven.
Johnson admitted to obtaining about $3.3 million worth of PPP loans for three Plainview entities. Two of those entities were Radar Foundation, a non-profit entity that organized fundraisers for people with intellectual limitations, and Radar Supports, an organization that provided speech and occupational therapy services.
Radar Supports employed about 10 people while the foundation had a handful of employees hired on an ad hoc basis. However, Johnson inflated the entities' employee roster and payroll when he applied for the PPP loans. Some of the employees listed either didn't exist or were clients of the entities. He also provided false IRS forms and employee lists as part of the application.
Meanwhile, the third entity, Radar Supports Construction, was a bogus business created for the purposes of obtaining the PPP loans.
The founder of those entities, 50-year-old Hope Leticia Hastey, signed documents earlier this month indicating she plans to plead guilty to a count of misprision of a felony. Court documents state she knew of the plan and didn't report it to authorities. Instead, investigators found she tried to cover up the fraud.
She is set to appear for an Aug. 30 initial appearance hearing in U.S. Magistrate Court.
Johnson also obtained more than $436,000 worth of PPP loans for 11 independent contractors. At least four of the loans' recipients were unaware that Johnson applied for the loans under their names. Two of whom were relatives and two were colleagues. None of them knew of the loans.
During Thursday’s sentencing hearing, prosecutors told the court that he used his elderly mother’s and elderly aunt’s identifying information and forged their signatures on loan documents. The women never received any of the money. Mr. Johnson also used the identifying information and forged the signature of another Plainview resident to obtain two loans.
Johnson also used those people's names and information without their permission to open bank accounts where the PPP loans were deposited.
The investigation indicated Johnson and Hastey were in a relationship and used the fraudulently money on personal luxuries. The two spent $3.5 million on home renovations, vacations, vehicles, clothing, cosmetic surgery, college tuition, cars, wedding expenses, and equipment for an unrelated business venture, according to the release.
This article originally appeared on Lubbock Avalanche-Journal: South Plains man gets 15-year sentence in PPP loan fraud scheme
