‘Cynical effort.’ Kentucky promoter sentenced over $370,000 in coronavirus loan fraud

An Eastern Kentucky man who lied to get $370,000 in coronavirus payroll loans has been sentenced to two years and nine months in federal prison.

David Christopher Lewis, 49, is also responsible for repaying the $370,000, though he said in bankruptcy filings earlier this year that he had between $50,000 and $100,000 in assets but $100,001 to $500,000 in debts.

U.S. District Judge Robert E. Wier sentenced Lewis, of Harlan County, on Thursday in federal court in London.

Lewis pleaded guilty to wire fraud involving loans to two of his companies, Elite Artists Agency and Bubba Fest LLC.

Elite Artists managed appearances by celebrities and Bubba Fest was set up to put on live events, according to a letter by Lewis filed in the court record.

Lewis said that in 2018, he arranged an event called the Bubba Fest Southern-Fried Comic Con in Pigeon Forge, Tenn., with actors Burt Reynolds and Lee Majors and NASCAR legend Richard Petty as the headliners.

Lewis said the second Bubba Fest in 2019 in Knoxville, which included action star Chuck Norris, drew more than 12,000 fans and that 2020 was “poised to be a breakout year” for the companies before COVID-19 shut down live events nationwide.

Lewis applied for loans through the Payroll Protection Program, which Congress approved in the early days of the pandemic as a way to allow businesses to keep paying workers.

The loans could be forgiven if businesses kept employees on the payroll for a certain amount of time.

‘Severe consequences’

Lewis admitted he lied about the number of employees and the size of the payrolls at his businesses.

He also faked quarterly business tax returns and later lied to federal authorities about records.

Lewis’ attorney, Thomas C. Lyons, argued in a sentencing memorandum that based on records Lewis provided, it appeared he spent most of the money from the loans on legitimate expenses to try to keep his companies afloat.

The advisory sentence for Lewis ranged from 27 to 33 months in prison, but Lyons argued for a maximum of 18 months behind bars followed by six months of home detention.

Lyons said Lewis has supported a number of charitable and causes, including the American Red Cross, the Harlan Boys and Girls Club and the Putney Bible Church, and also pointed to his mental-health problems in seeking a lesser sentence.

Lewis has been diagnosed with post traumatic stress disorder and personality disorder, with paranoid traits. Being in jail has exacerbated the illnesses, and he could receive better treatment outside prison, Lyons said.

Lewis “has experienced severe personal and professional consequences from this prosecution,” including being apart from his children, Lyons said.

However, the prosecutor, Assistant U.S. Attorney Paul McCaffrey, called Lewis’s fraud “a cynical effort” to capitalize on the pandemic and taxpayer money.

McCaffrey said it appears Lewis used some of the loan money to pay existing business debts, such as $15,000 to Petty and $12,000 to actor Nikolaj Coster-Waldau, who was in Game of Thrones on HBO, and to pay people who had worked for Bubba Fest.

‘Willing to lie’

But Lewis also used the money for personal purposes, including purchases at Walmart and Amazon; cash withdrawals at automatic teller machines; and money for his girlfriend, the prosecutor said in a sentencing memo.

Evidence submitted at the sentencing hearing showed that between May 26 and Aug. 28, 2020, Lewis paid himself or his wife more than $100,000 of the loan money, according to a news release from the FBI and U.S. Attorney Carlton S. Shier IV.

McCaffrey said there was reason to doubt a claim by Lewis that most of the loan money went to cover payroll expenses.

For example, a transfer from the Bubba Fest account that said it was payable to an “alleged employee” actually went into an account in Lewis’ name and he used it to make credit-card payments, the memo said.

Transfers of loan money to other people who had allegedly worked for Lewis’ companies also went to accounts in his name or the name of his wife, the memo said.

Lewis’ efforts to conceal the fraud included asking at least one person to sign a backdated contract showing she had worked for Bubba Fest in 2019, when she hadn’t, McCaffrey said.

McCaffrey noted that Lewis had prior criminal convictions for cashing forged checks, stealing someone’s identity to obtain credit cards, and using stolen money orders to pay off debt.

Lewis’ history “makes clear that he is willing to lie and cheat if he perceives it as financially advantageous,” McCaffrey said.

Lewis has been in jail since he was arrested last October, so that time will count toward his sentence.

Dispute with Chuck Norris

Lewis got into a dispute with Norris after the 2019 comic con in Knoxville, with Norris claiming Lewis and Bubba Fest didn’t pay him all he was owed.

Lewis claimed he gave the money he owed Norris to an intermediary to give to the actor, and that if Norris didn’t get it all, that was not his company’s responsibility.

An arbitrator in Texas sided with Norris, ordering Lewis to pay $31,050 under the appearance contract, attorneys’ fees of $130,489 and $11,630 in arbitration costs.

Attorneys for Norris’ company are still trying to collect in federal court in Kentucky.