A Baltimore County businessman, David Epstein, has been sentenced to one year and one day in federal prison, followed by 12 months of home incarceration. This sentencing comes after his guilty plea to wire fraud charges related to fraudulent CARES Act loan applications. U.S. District Judge Richard D. Bennett delivered the sentence.
The announcement was made by Kelly O. Hayes, U.S. Attorney for the District of Maryland, alongside Special Agent in Charge Kareem A. Carter from the IRS-CI Washington, D.C. Field Office.
The CARES Act, established in March 2020, aimed to provide financial assistance during the COVID-19 pandemic through programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL). These initiatives were designed to support small businesses with forgivable loans for job retention and other expenses.
According to court documents and Epstein's plea agreement, he engaged in a scheme from May 2020 through February 2021 to defraud financial institutions including Cross River Bank, Bluevine, Celtic Bank, and the SBA. Epstein submitted false PPP loan applications on behalf of his company PEI Staffing (PEI), claiming funds under false pretenses.
On April 30, 2020, Epstein applied for approximately $1.3 million in PPP funds using misleading information about PEI's employee numbers and wages. The application falsely stated that PEI employed 382 workers when only 79 were listed on an IRS Form 941 for that period.
Epstein also submitted a fictitious SunTrust Bank statement linked to another business he managed called Stafquik. After receiving the PPP funds on May 4, 2020, Epstein transferred them into personal accounts for unauthorized use such as purchasing a luxury car and renovating his home.
The case is part of efforts by the District of Maryland Strike Force and other national strike forces set up by the Department of Justice to combat COVID-19-related frauds. These teams focus on large-scale pandemic relief fraud involving criminal organizations.
U.S. Attorney Hayes commended the IRS-CI for their investigative work and acknowledged Assistant U.S. Attorney Paul A. Riley along with Paralegal Specialist Joanna B.N. Huber for their contributions to prosecuting this case.
For further details on reporting fraud or understanding more about these initiatives, resources are available at www.justice.gov/usao-md.
