Man makes up business to get COVID loans — then uses money for boat wedding, feds say
A Michigan man made up a bogus business — and said it employed 11 workers — then created fake bank records and payroll sheets to apply for Paycheck Protection Program loans, according to federal authorities.
He received about $170,000 through two different loans — then used those government funds to help pay for a boat wedding in Florida and his BMW 650i convertible, authorities said.
Now Kurtis James VanderMolen, 50, of Grand Rapids, has pleaded guilty to bank fraud and money laundering, according to a Dec. 15 news release from the U.S. Attorney’s Office for the Western District of Michigan.
His defense attorney did not immediately respond to a request for comment from McClatchy News on Dec. 16.
PPP loans were created to help keep small businesses employed during the COVID-19 pandemic, but authorities said VanderMolen fraudulently abused the system.
When applying for his first PPP loan in July 2020, VanderMolen claimed “Breakout Strategies” was a business established in January 2020, according to court records. Officials said he submitted his PPP application to a bank in New Jersey.
VanderMolen received a $100,641 PPP loan, which he used for personal expenses, according to his signed plea agreement. On Sept. 1, 2020, he used $18,752 of loan money to make his final payment on a 2010 BMW 650i convertible, officials said.
“In February 2021, when VanderMolen ran out of his initial PPP loan proceeds, he applied for a second PPP loan on behalf of Breakout Strategies and again submitted fraudulent bank records, fake payroll records, and false tax documents to make it appear as though Breakout Strategies was a real company,” according to the news release.
This time, authorities said he received $69,361 through the scheme.
He used the second loan for more personal purchases, including his wedding aboard a boat off the Florida coast, according to his plea agreement.
“This was federal aid that was intended to support our country’s critical small businesses, not to buy luxury cars or pay for wedding expenses,” U.S. Attorney Mark Totten said in the release. “My office will continue to aggressively prosecute COVID-19 relief fraud using all available remedies.”
VanderMolen faces up to 40 years in federal prison, officials said. He’ll also be expected to pay back the stolen money in restitution.
His sentencing is scheduled for March 27.
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