In January of 2023, Dr. Francis Joseph, the founder of Springs Medical Associates, was found guilty of COVID-19 relief fraud from the Accelerated and Advance Payment Program and the Paycheck Protection Program. He was sentenced to 2.5 years in prison and ordered to pay $266,716 in restitution. But Joseph wasn’t going to take his conviction without a fight.
On July 30, 2024, Joseph appealed, arguing there was insufficient proof that he knowingly, willfully or intentionally committed a crime. He argued prosecutors failed to prove he acted with the required mental state to embezzle more than a quarter million dollars through federal pandemic relief programs in 2020. Instead, he believed he was protecting the funds from his company’s chief operating officer, who Joseph suspected of malfeasance. The malfeasance being that the COO fired him a couple of months prior?
But a three-judge panel of the U.S. Court of Appeals for the 10th Circuit saw things differently, determining Joseph’s false representations, his attempts to disguise the financial transactions, and his ultimate use of the money were robust evidence of his guilt. Robust being that he spent the money on porn sites and child support. He even moved approximately $90,000 in AAP funds to his daughter’s bank account.
Once the company found out about Joseph’s transfer of funds, he responded: “It’s my effing money and I will do with it what I want.” Not true. And on July 30, 3034, 10th Circuit upheld Josephs convictions to COVID-19 loan fraud.
Great job by the COVID-19 Fraud Enforcement Task Force. Not so fun fact, 17% of PPP and other loans appear to be fraudulent. This team has a lot on their desk.
Today’s Fraud of The Day is based on article “10th Circuit upholds COVID fraud convictions of Colorado Springs-based doctor” published by Colorado Politics on July 30, 2024.
The federal appeals court based in Denver agreed on Monday that jurors heard sufficient evidence to convict a doctor of fraudulently obtaining COVID-19 aid from the government and spending it on himself, not on his medical practice headquartered in Colorado Springs.
Francis Joseph, the founder of Springs Medical Associates, argued prosecutors failed to prove he acted with the required mental state to embezzle more than a quarter million dollars through federal pandemic relief programs in 2020. Instead, he believed he was protecting the funds from his company’s chief operating officer, who he suspected of malfeasance.
