Wichita chiropractor’s lies got him $145K in pandemic-era paycheck protection loans
A chiropractor who lives in Haysville and practices in Wichita pleaded guilty on Monday to one count of money laundering for misusing funds from two COVID-19-era Paycheck Protection Program loans that were later forgiven in full, according to federal court records and a news release from the U.S. Attorney’s Office for the District of Kansas.
The fraud cost the Small Business Administration more than $145,000.
Timothy Dale Warren, 59, owner of Titan Medical Center in south Wichita, is scheduled to be sentenced on Oct. 3. According to the news release and court records, between May 11, 2020, and April 26, 2021, Warren lied and “submitted false documents to banks in order to fraudulently obtain” the loans from the Small Business Administration.
In one instance, he took $35,500 in first-draw loan money for a business that didn’t exist at the time and converted it into a cashier’s check, which he then deposited into a business account at another bank, according to court records and the news release. He later did the same with $35,577.30 in second-draw loan proceeds, court records say.
“Dr. Warren acknowledges his poor judgment, accepts full responsibility for his behavior, and is committed to repaying his debt to the government,” Warren’s lawyer, Mark Schoenhofer, said in an emailed statement Tuesday.
Titan Medical Center, 1415 W. 31st St. South, offers chiropractic care, school sports physicals and other services.
The Paycheck Protection Program loans, available under the CARES Act, were designed to help business owners in the U.S. stay afloat during the Covid-19 pandemic.
The banks gave Warren the loans because they “were influenced” by his lies, which included misrepresenting that his medical practice was two separate businesses and that 100% of the loan proceeds would go toward payroll costs, court records show.
Warren also submitted fake payroll records and Internal Revenue Service tax forms, submitted fake profit and loss statements, claimed he “did not own or have common management of other businesses,” claimed he wouldn’t receive another Paycheck Protection Loan and “certified (that) not more than 25% of loan proceeds would be used for ... non-payroll costs, or not more than 40% for second draw loans,” the records say.
In total, Warren’s fraud cost the Small Business Administration $145,877.70 — first and second draw loans for Titan Medical Center and the same for another business, Chiropractic Care Center, which is a former practice that Warren turned into Titan Medical Center in 2016 — according to court records and the U.S. Attorney’s Office news release.
The Small Business Administration later gave the banks loan forgiveness in full “based on further misrepresentations” by Warren, his plea agreement says.
“The federal government created programs to provide economic relief to businesses, struggling to stay afloat during the COVID-19 related shutdowns. Unfortunately, Timothy Warren manipulated a well-intentioned program into a mechanism of personal financial gain and must now be held accountable,” U.S. Attorney Kate E. Brubacher said in a prepared statement included in the release.
Attorneys are planning to ask a judge to place Warren on probation for four years when he is sentenced, according to his plea agreement. The government has also agreed to dismiss other criminal counts in exchange for Warren’s guilty plea. He was originally indicted in August 2022 on 10 counts, including bank fraud, money laundering and making false statements.
Warren has agreed to pay restitution $145,877.70 to the Small Business Administration, according to his plea agreement.
