A Sacramento man on Monday pleaded guilty to submitting false payroll records and other documents to claim more than $1.2 million in federal COVID-19 relief loans intended for small businesses suffering financially during the pandemic, prosecutors said.
Aaron Ashcraft, 42, pleaded guilty to one count of wire fraud and one count of bank fraud for the scheme he carried out from May 2020 through April 2021, according to a news release from the U.S. Attorney’s Office in Sacramento.
As part of his plea agreement, Ashcraft also admitted he embezzled at least $780,000 from his former employer, a street-sweeping company in Sacramento, and he admitted he defrauded the Maine Department of Labor to obtain unemployment compensation of more than $58,000, federal prosecutors said.
The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, was enacted March 29, 2020, to offer millions of Americans emergency financial help, including forgivable loans to small businesses for job retention and other expenses through the Paycheck Protection Program.
Prosecutors said Ashcraft submitted to approved lenders at least seven fraudulent Paycheck Protection Program loan applications in the names of purported businesses with employees and monthly payroll expenses. He also submitted fabricated records, including IRS forms, checking account statements and payroll summaries, requesting in excess of $1.2 million in loans and obtaining about $920,000, according to the U.S. Attorney’s Office.
Ashcraft admitted he embezzled at least $780,000 from his former employer from September 2017 through June 2020, prosecutors said. Ashcraft worked as chief financial officer at the company and had access to the business’ credit card accounts, which he used to pay personal expenses, according to the U.S. Attorney’s Office.
Ashcraft also falsely claimed he lived in Maine and was unable to work there due to COVID-19 in a July 2020 application for Pandemic Unemployment Assistance, receiving more than $58,000, he admitted in court as part of his plea deal. Prosecutors said Ashcraft submitted falsified IRS forms, claiming he operated a business in 2019 in Maine that received more than $160,000 in income and made a net profit of more than $66,000.
The U.S. Attorney’s Office said Ashcraft agreed to pay restitution, including $919,598 to three approved lenders, $45,979 to the Small Business Administration, $779,832 to his former employer and $58,050 to the Maine Department of Labor.
Ashcraft is scheduled to be sentenced Aug. 22. Prosecutors said he faces a maximum sentence of 20 years in prison and a $250,000 fine for wire fraud, and he faces a maximum sentence of 30 years in prison and a $1 million fine for bank fraud.
This story was originally published May 9, 2022 5:43 PM.