Covid fraudster who bought property, Tesla Stock with stolen cash is caught

Hundreds of people have been prosecuted for falsely obtaining taxpayer-backed funds from plans intended to help small businesses during the pandemic, such as the Paycheck Protection Program.
Representative image (REUTERS)
Representative image (REUTERS)
Published on Jan 08, 2022 12:01 PM IST
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Bloomberg | , New Delhi

The businessman from Lebanon, Oregon, made millions buying nearly 16,000 shares of Tesla Inc., but lost it all -- along with his freedom -- when the feds figured out he had bankrolled his investments with proceeds from fraudulently obtained Covid-relief loans.

Hundreds of people have been prosecuted for falsely obtaining taxpayer-backed funds from plans intended to help small businesses during the pandemic, such as the Paycheck Protection Program. Many of them spent the money, and prosecutors were able to recover only a fraction of it. But that wasn’t the case with Lloyd, where the government got back a lot more than he scammed.

Lloyd, 51, got about $3.4 million by filing fake applications in the names of businesses owned by relatives and associates, all without their knowledge, according to court records. He used some of the proceeds to buy more than 25 pieces of real estate in Oregon and California, prosecutors said.

But his biggest windfall came with his 2020 purchase of 15,740 shares of Tesla using government money and a loan from Charles Schawb secured by equities he’d purchased with the stolen cash. 

‘Increased Exponentially’

Tesla’s stock has skyrocketed since then, handing investors returns of about 50% last year alone. Lloyd’s investment was worth more than $11 million at the time agents seized his shares in January last year and $16.8 million at the close of trading Thursday.

“Lloyd transferred over $1.8 million of the PPP funds to his E*TRADE Securities brokerage account and purchased securities,” prosecutors said in a court filing. “Fortunately for the government, and for Mr Lloyd’s restitution obligation discussed below, the value of those securities increased exponentially.”

Federal agents also seized another of Lloyd’s security accounts, containing $660,000 in securities and cash.

Lloyd, who pleaded guilty in June to bank fraud, money laundering, and aggravated identity theft, was sentenced Thursday to four years in prison, according to the U.S. Attorney’s Office in Oregon. He was also ordered to pay $4 million in fines, surrender real estate bought with the ill-gotten money, and forfeit his brokerage accounts valued at $18 million.

His lawyer didn’t return a request for comment.

The case is U.S. v. Lloyd, 6:21-cr-00198, U.S. District Court, District of Oregon (Eugene).

 

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Thursday, May 26, 2022