O’Fallon Man pleads guilty to PPP loan fraud | USAO-SDIL

O’Fallon, Illinois – Jason Spengler (45), of O’Fallon, Illinois, pleaded guilty today to one count of
make a false statement on a federal loan application. According to court documents, Spengler
committed the criminal offense last year when he applied for paycheck assistance
Protection Program (“PPP”) without disclosing that his company, Spengler Plumbing Company, was in
bankruptcy.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted in March 2020 to
provide emergency financial assistance to Americans who were experiencing the economic effects caused
by the COVID-19 pandemic. One of the sources of relief provided by the CARES Act was the federal PPP loan
program. Administered by the Small Business Administration (SBA), the program provided
loans to help eligible businesses during the COVID-19 crisis.

Bankrupt debtors were not eligible for PPP loans. The first question on the loan application
asked, “Is the plaintiff…currently involved in bankruptcy?” above that
question, the application explained that the loan would not be approved if the applicant answered
“Yes.”

When Spengler applied for a PPP loan last year, Spengler Plumbing was bankrupt. But Spengler
ticked “No” on the application, falsely certifying to the lender and the SBA that Spengler
The plumbing wasn’t broke. Because of this misrepresentation, Spengler Plomberie was awarded a
PPP loan of $487,095 in April 2020.

As a debtor in bankruptcy, Spengler Plomberie was also required by law to obtain prior authorization
bankruptcy court before incurring any new unsecured debt. But Spengler applied for the
loan from the State without notifying the judge-commissioner, thus circumventing the safeguards put in place
by the SBA and the bankruptcy court.

“Together with U.S. Attorney Steve Weinhoeft and our law enforcement partners, we will continue to
prosecute fraud and abuse in bankruptcy cases,” said Nancy J. Gargula, U.S. Regional Trustee
10. The US Trustee Program is the component of the Department of Justice that protects the integrity
of the bankruptcy system by overseeing the administration of cases and advocating to enforce bankruptcy
laws. Region 10 is headquartered in Indianapolis, with additional offices in South Bend, Indiana,
and Peoria, Illinois.

Sentencing is set for August 18, 2021 at the Eastern Federal Courthouse. Saint Louis. Load
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a maximum sentence of five years in prison and a fine of up to $250,000.

This case has been referred to the US Attorney’s Office for prosecution by the US Regional Trustee
10, in conjunction with the Southern District of Illinois Bankruptcy Fraud Working Group.
The investigation was conducted by the Small Business Administration – Inspector’s Office
General. The case is being prosecuted by Assistant United States Attorney Peter T. Reed.

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