On Friday, Andrew Johnson pleaded guilty in the Northern District of Texas to three counts of bank fraud, one count of aggravated identity theft, and one count of engaging in monetary transactions in property derived from unlawful activity, according to a news release published by the U.S. Department of Justice (DOJ).
Johnson swindled millions from the Paycheck Protection Program passed in the early weeks of the pandemic to help stave off the economic effects of business closures, government restrictions, and shelter-in-place mandates. As part of the fraud, Johnson applied for and received forgiveness for 27 bogus loans.
He spent more than $3.5 million of the stolen funds on “home renovations, vacations, clothing, cosmetic surgery, college tuition, cars, wedding expenses, and equipment for an unrelated business venture,” according to the DOJ.
Prosecutors said Johnson used two real entities and one fictitious entity to make bogus applications for relief funds. He lied that a contract-based speech and occupational therapy business had 49 employees and $441,667 in monthly payroll expenses and paid $5.1 million in compensation in 2019. Based on the false information, he was able to acquire loans totaling $2.2 million over two years.
The business actually had 10 employees on an as-needed basis and paid less than $100,000 in wages in 2019, the news release added.
The DOJ indicated Johnson also inflated the number of people employed by a nonprofit organization that orchestrates fundraising efforts for those with intellectual disabilities. He claimed the nonprofit had 33 employees when it had fewer than five, and received two loans totaling $523,000. The fraudulent application on behalf of the fictitious business produced a $653,540 loan.
He also stole $436,525 by claiming that 11 people worked for him as “independent contractors.” The DOJ emphasized that four of these people were not even aware he was using their identity.
In addition to the possible 102-year prison sentence, he will be ordered to pay $4 million in restitution as part of his plea.
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Hayden Sparks
Hayden Sparks is a senior reporter for The Texan and a lifelong resident of the Lone Star State. He has coached competitive speech and debate and has been involved in politics since a young age. One of Hayden's favorite quotes is by Sam Houston: "Texas has yet to learn submission to any oppression, come from what source it may."
