Richard Nieto, a 39-year-old resident of Morrison, Colorado, has been sentenced to 46 months in federal prison. The U.S. Attorney’s Office for the District of Colorado announced that Nieto was also ordered to pay $962,438.85 in restitution for wire fraud and money laundering related to two Paycheck Protection Program (PPP) loans during the COVID-19 pandemic.
Nieto submitted three fraudulent PPP loan applications, seeking a total of $1,117,903.56 and successfully obtaining two loans amounting to $913,551.88. In his first successful application for $175,384.83, he inflated employee numbers and payroll figures for his business, Denver Pro Painting & Contracting. He fabricated Forms 941 that did not match tax returns filed with the IRS. His second successful application secured $738,167.05 for another business named DenPro, which had no employees or operations.
Before making any payments on these loans, Nieto submitted fraudulent loan forgiveness applications by creating 87 fake payroll checks and paystubs. One of the PPP loans was fully forgiven based on these falsified documents.
Despite claiming that the funds would be used for business expenses, Nieto transferred the loan money through multiple accounts before spending it on personal expenditures such as a home mortgage payment, bitcoin purchases, investments in an account and a friend's startup business, as well as buying gold and silver coins.
Acting United States Attorney J. Bishop Grewell stated: “This is another case of someone using for personal gain a program meant to help people suffering during the COVID-19 pandemic.” Amanda Prestegard from IRS-CI Denver Field Office added: “Mr. Nieto went to great lengths to abuse a program meant for hardworking small business owners.”
The sentencing was presided over by United States District Judge William J. Martinez. The investigation was conducted by the Internal Revenue Service Criminal Investigation team with Assistant United States Attorneys Craig Fansler and Martha Paluch handling prosecution.
