Dumb Luck

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Becoming a day trader is not for those who are risk averse. To be successful, one must be disciplined, patient, knowledgeable about the stock market, and adaptable when trading strategies go wrong. (Oh, and you need a lot of money to get started, plus a fair amount saved up in case you lose money on your risky investments.)  

Andrew Aaron Lloyd, 51, of Lebanon, Ohio, used $3.4 million in illegally-obtained COVID-19 relief funds to invest in Tesla stock and 25 rental properties across Oregon and California, valued at $18 million. (You could say that this fraudster was quite the opportunist when it came to using pandemic relief funds from the government to build up his investment portfolio.)

Lloyd worked quickly, carrying out his ruse over 60 days. During that time, court documents explain that he submitted more than a dozen bogus applications for home care, shopping and construction businesses. One of the flaws in his grand plan was using the same list of 56 “fake” employees to claim millions of dollars in bogus payroll expenses. (He probably thought everyone was too busy with vaccine mandates and masks to check on the details of his fraudulent applications.)

Lloyd received a $1.8 million slice of the Paycheck Protection Program (PPP) pie and transferred those stolen funds into his brokerage account. (We should all be so lucky to use taxpayer money as a retirement back up plan, not.) Call it dumb luck, but that $1.8 million grew to $13 million when Lloyd’s 15,000 shares of Tesla stock soared. He also received a fraudulent $160,000 Economic Injury Disaster loan from the U.S. Small Business Administration (SBA).

Court records show that Lloyd closely followed the various rounds of PPP funding, texting an accomplice that Congress would add “another [$]300 billion very soon.” Those texts helped implicate his accomplice, Russell Anthony Schort, 39, of Myrtle Creek, Ore., who made $295,000 by submitting a fake application filled out by Lloyd. His cut cost him 14 days in prison, restitution of the cash he received as a kickback for his assistance, plus three years of probation. (Perhaps his sentence was light because he provided some inside information to prosecutors.)

The opportunistic fraudster who got lucky as a day trader was not quite as lucky when he stood before the judge. Lloyd pleaded guilty to charges of bank fraud, money laundering and wire fraud. He was sentenced to four years in prison and was ordered to pay $4 million in restitution. In addition, he must also forfeit his real estate assets and Tesla stock. (Perhaps if he had agreed to return these funds voluntarily, the justice system may have gone lighter on him.) It is interesting to note that Lloyd’s sentencing marks Oregon’s largest closed case of COVID-19 relief fraud. (Congrats to the law enforcement officials who made sure this fraudster’s dumb luck ran out.)

Today’s Fraud of the Day comes from an article, “Oregon man who defrauded COVID relief programs, used ‘sheer dumb luck’ to net $13M in Tesla stock sentenced to 4 years in prison,” published by OregonLive.com on January 6, 2022.

An Oregon man who created several hundred employees out of thin air and then fraudulently obtained $3.4 million in COVID-19 relief funds has been sentenced to four years in prison.

Andrew Aaron Lloyd invested his ill-gotten gains and won big — eventually purchasing more than 15,000 shares of Tesla stock and 25 rental properties in Oregon and California, valued at a combined $18 million.

 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.