Grand Rapids Trucking Company owners plead guilty to bank fraud conspiracy and pay $1,000,000 in related civil case, in connection with Covid-19 relief fraud | USAO-WDMI
DMR Transportation falsified financial records to receive second loan under Paycheck Protection Program
GREAT RAPIDS, MICHIGAN – Semsi Salja and Anes Suhonjic, owners of Grand Rapids-based trucking company DMR Transportation (“DMR”), pleaded guilty in federal court today to conspiracy to commit bank fraud in connection with a loan of $290,855.00 under the Paycheck Protection Program (“PPP”). In a related civil case, DMR, Salja and Suhonjic agreed to pay a total of $1,000,000.00, including a substantial civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act ( “FIRREA”).
In 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to provide emergency federal assistance to millions of Americans suffering from the economic effects of the COVID-19 pandemic. Through the PPP, the CARES Act authorized repayable loans to small businesses for maintaining employment and certain other expenses. In December 2020, Congress enacted the Hard-Hit Small Business Economic Relief Act, which reopened PPP to new borrowers and, subject to stricter limitations and conditions, authorized second-draw PPP loans to borrowers who had previously received a PPP loan. Borrowers were eligible for second-draw PPP loans if, among other things, they suffered a reduction in income of 25% or more in 2020 compared to 2019.
In its second PPP loan application, DMR knowingly and falsely certified that it had achieved the required 25% reduction in gross receipts between the second financial quarter of 2019 and the second financial quarter of 2020. DMR also submitted falsified quarterly balance sheets and d other fake financial documents that were signed by Salja and Suhonjic along with the request. In September 2021, DMR requested the cancellation of its second-draw PPP loan by falsely certifying that the proceeds of its second-draw PPP loan had been used to pay for eligible business expenses when, in fact, DMR held that money. reserved.
“The PPP involved a limited pool of funds to help small businesses ravaged by the disruption of a global pandemic,” said U.S. attorney Mark Totten. “By fraudulently obtaining a second PPP loan, DMR grabbed hundreds of thousands of dollars that could have been used to help deserving businesses. My office will continue to aggressively investigate and prosecute these cases.
“By illegally taking additional money from the Paycheck Protection Program, these defendants harmed owners and employees of small businesses battling the pandemic,” said FBI Special Agent in Charge James A. Tarasca. in Michigan. “The FBI is committed to working with our law enforcement partners to investigate and hold accountable anyone who takes advantage of a global pandemic to line their pockets.”
“Today’s guilty plea and FIRREA civil penalties hold the defendants accountable for their role in fraudulently obtaining a second loan under a federal relief program created to help small businesses that were debating because of the pandemic,” said Special Agent in Charge Kathy A. Enstrom of the Office of the Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG). “The FDIC-OIG remains committed to working with our law enforcement partners to hold accountable those who seek to abuse these programs and undermine the integrity of our nation’s banks.”
Salja and Suhonjic face a maximum of five years in prison. U.S. District Judge Jane M. Beckering will determine their sentences after considering U.S. sentencing guidelines and other statutory factors.
Civil settlement includes resolution of claims brought under whistleblower provisions of the law on false allegations. Under these statutes, a private party may sue on behalf of the United States and receive a portion of the settlement or judgment proceeds. The whistleblower case is captioned, United States ex rel DePouw v. DMR Transportation, et al.#1:21-cv-548 (WD Mich.).
Assistant U.S. Attorneys Davin M. Reust and Adam B. Townshend represented the United States. The Federal Deposit Insurance Corporation’s Office of Inspector General and the FBI investigated the matter.