Man uses COVID-relief funds to buy 15K Tesla shares, pockets millions

Crime

Andrew Aaron Lloyd, of Lebanon, Oregon, pleads guilty to bank fraud, money laundering and aggravated identity theft

FILE: $100 bills. (NEXSTAR)

PORTLAND, Ore. (KOIN) — An Oregon man pleaded guilty Thursday after he fraudulently pocketed millions of dollars in loans intended to help small businesses during the COVID-19 pandemic. 

Andrew Aaron Lloyd, a 51-year-old from Lebanon, Oregon, submitted his guilty plea for bank fraud, money laundering and aggravated identity theft, according to the U.S. Attorney’s Office in the District of Oregon. 

Officials said Lloyd took advantage of economic relief programs administered by the Small Business Administration (SBA), such as Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans, with securities and cash seized from Lloyd’s personal accounts by authorities valued at more than $11 million.

Those loans were intended to provide emergency financial assistance to millions of Americans and small businesses suffering from the economic effects of the COVID-19 pandemic and authorized by the Coronavirus Aid, Relief and Economic Security (CARES) Act. 

“CARES Act relief programs were designed to help American small businesses weather a historically difficult time in our nation’s economic history. Andrew Lloyd saw an opportunity to profit off the COVID-19 pandemic and did so at the expense of hardworking Americans. Our office will continue to investigate and prosecute anyone who seeks to unfairly enrich themselves from public funds set aside to help those in need,” said Scott Erik Asphaug, Acting U.S. Attorney for the District of Oregon.  

Partnering agencies in the investigation included the Federal Bureau of Investigation in Oregon, the Internal Revenue Service Criminal Investigation unit and the SBA Office of Inspector General Western Region.

FBI agents initiated an investigation into Lloyd in October 2020 based on information suggesting he had fraudulently applied for PPP loans and EIDL at multiple financial institutions, according to court documents. Lloyd began submitting loan applications using numerous business names and personally identifiable information of relatives and business associates without their consent back beginning in April 2020.

Lloyd submitted false documents to justify the loan amounts requested, including fraudulent IRS and 2019 wages forms purportedly paid by entities controlled by Lloyd. The allegedly wages paid by these entities ranged from $3 million to more than $4.7 million. Between 56 and 64 employees with total wages paid to each were listed on Floyd’s loan applications, with the application packages sometimes containing duplicate information across the different business entities, such as duplicate addresses and employee names. 

A payout of more than $3.4 million for six accepted PPP loans was dispersed to Lloyd, who originally submitted applications for nine PPP loans in total. A number of EIDL applications were also submitted, of which one was accepted and resulted in an additional $160,000 in payments to Lloyd.

Lloyd reportedly purchased real estate and invested in securities upon receiving the funds, including transferring more than $1.8 million in PPP loan fund dollars to his E*TRADE Securities brokerage account. The securities Lloyd purchased using fraudulently received funds then substantially increased in value.

The brokerage account, which included 15,740 shares of Tesla, Inc. and purchased with proceeds of his fraud, was seized by agents in January 2021. Agents seized an additional account containing more than $660,00 in securities and cash in March 2021. In total, $11 million in securities and cash was seized from Lloyd’s accounts.

Lloyd was charged by criminal complaint with wire fraud, bank fraud, and money laundering on January 5, 2021. On January 7, 2021, he was arrested and made his first appearance in federal court. He was charged by superseding criminal information with bank fraud, money laundering, and aggravated identity theft on June 6, 2021.

The U.S. Attorney’s Office will join Lloyd, with his continued acceptance of responsibility, in jointly recommending a sentence of 61 months in federal prison, officials said. He will be sentenced on September 9, 2021 before U.S. District Court Judge Michael J. McShane.

Lloyd has agreed to pay more than $3.6 million in restitution to the U.S. Treasury as part of his plea agreement. He also agreed to forfeit more than $11 million in cash and securities and 23 properties that were purchased with PPP funds.

Russell Anthony Schort, 39, of Myrtle Creek, Oregon, was an accomplice of Lloyd’s and was charged alongside Lloyd for similar conduct. On July 1, 2021, Schort is scheduled to plead guilty 

Those with information about allegations of attempted fraud related to 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.

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