A California businessman has admitted to a federal fraud charge for obtaining over $14 million in small business loans under the CARES Act. Darren Carlyle Sadler was involved in a scheme to apply for loans through the Paycheck Protection Program (PPP), which aimed to provide financial relief for small businesses during the Covid-19 pandemic.
Sadler acknowledged in a plea agreement that he submitted and facilitated at least 63 PPP loan applications for himself and his clients in 2020. These applications falsely stated the number of employees and average monthly payroll of the supposed businesses, leading to more than $14 million being issued in loan funds. Sadler also collected over $1.9 million in fees from clients for securing these fraudulent loans.
The proceeds from this fraud were used by Sadler to rent a villa during the pandemic, travel on private jets, purchase luxury vehicles such as a Rolls Royce, multiple Mercedes-Benzes, and a Land Rover, as well as designer clothing, a luxury watch, and meals at expensive restaurants.
Sadler, aged 38 from Costa Mesa, California, pleaded guilty to federal wire fraud charges on Monday. This charge carries a potential sentence of up to 20 years in federal prison. U.S. District Judge Thomas M. Durkin has yet to set a sentencing date.
The guilty plea was announced by Andrew S. Boutros, United States Attorney for the Northern District of Illinois, along with Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI. The investigation involved collaboration with the U.S. Small Business Administration Office of Inspector General and the U.S. Postal Inspection Service. Assistant U.S. Attorney Kartik K. Raman is representing the government.
