COVID Feature: A Slice of Cheese

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Russian hacker hacking the server in the dark

Donald Franklin Trosin, 56, from Champlin, Minn. pleaded guilty for his role in a scheme to fraudulently obtain and launder more than $1.2 million in Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL). (Fraudsters don’t seem to understand that the government doesn’t like it when you steal from them.)

PPP and EIDL loans are funded through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and are earmarked for millions of Americans who are suffering the economic effects of the COVID-19 pandemic. (These loans are intended to be distributed to qualifying small businesses through the Small Business Administration, not fraudsters who want to spend the funds on selfish desires.)  

Trosin admitted he participated in a scheme to defraud the United States out of PPP and EIDL loan funds. He submitted more than 20 loan applications to the Small Business Administration for various companies that he claimed to own and operate. (You’d think the “owner” of 20 companies wouldn’t need any financial assistance.)  Each application either listed his name or the name of another person who may have been an accomplice.

The applications falsely claimed that Trosin had 120 employees on his payroll and more than $5 million in payroll expenses. (He supported this claim by using fabricated tax documents, not thinking the government would check their records.) This information turned out to be false as Trosin does not own or operate any businesses and was not eligible to receive the loans he applied for.

Trosin also admitted that there were others involved in this fraudulent loan scheme. After receiving the loan funds through banks in Minnesota and Northwest Iowa, he withdrew and wired proceeds from the scheme to individuals in other states. Authorities are working on identifying these individuals and bringing anyone involved in the scheme to justice. (Fraudsters are like mice. Where there’s one, there are definitely more looking for their own slice of cheese.)

A judge convicted Trosin of one count of major fraud against the United States and one count of money laundering conspiracy. He faces up to 20 years’ imprisonment, more than $5,000,000 in fines, and three years of supervised release following any imprisonment.     (Seems like a just punishment for exploiting his fellow Americans.)

Today’s Fraud of the Day comes an article, “Minnesota Man Pleads Guilty in Paycheck Protection Fraud,” published by U.S. News via the Associated Press on February 16, 2021.

A Minnesota man pleaded guilty in federal court Tuesday to participating in a scheme to defraud the federal government out of $1.2 million in disaster relief funds by receiving fraudulent loans from banks in northwest Iowa and Minnesota.

Donald Franklin Trosin, age 56, from Champlin, Minnesota, formerly of Armstrong, Iowa, pleaded guilty to major fraud against the U.S. and money laundering conspiracy.

 

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.