United States Attorney Michael A. Bennett announced today that Mandy Ellen Bauer, age 41, pleaded guilty to an Information charging her with 9 counts of fraud related to various CARES Act financial assistance programs.
According to court documents, between April and July 2020, Bauer, of Greensburg, Kentucky filed 9 fraudulent applications for various CARES Act financial assistance programs, including Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loans (EIDL), and advance payment of tax credits, resulting in an attempted theft of over $230,000. Bauer exaggerated the gross revenues, number of employees, and payroll of her company, Family Personal Sales, in the fraudulent applications.
PPP loans were designed to provide a direct incentive for small businesses to keep their workers on the payroll. Under this program, the Small Business Administration (SBA) would forgive all or part of loans if all employees were kept on the payroll for eight weeks and borrowers submitted documentation confirming that the loan proceeds were used for payroll, rent, mortgage interest, or utilities.
EIDLs provided loan assistance (including $10,000 advances) for small businesses and other eligible entities for loans up to $2 million. The EIDL proceeds could be used to pay fixed debts, payroll, accounts payable and other bills that could have been paid had the disaster not occurred.
Finally, as part of the CARES Act, the Internal Revenue Service (IRS) created the Form 7200, Advance of Employer Credits Due To COVID-19, to allow employer businesses to request an advance payment of the tax credits prior to the filing of their Form 941.
Bauer waived an Indictment and pleaded guilty to a nine count Information charging her with wire fraud in violation of Title 18, United States Code, Section 1343. Bauer made her initial court appearance and pleaded guilty on February 2, 2022, in the United States District Court for the Western District of Kentucky. A sentencing hearing is currently scheduled for May 11, 2022. Bauer faces a maximum of 180 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Treasury Inspector General for Tax Administration (TIGTA) is investigating the case. Assistant U.S. Attorney David Weiser is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.