Pa. man sentenced for $2 million COVID-19 pandemic fraud scheme

Scranton, Pa. — A Pennsylvania man will spend 12 years in prison after defrauding the government of $2.1 million in pandemic relief funds.

Christopher J. Miller, 36, of Newfoundland, spent the money on cars, vacations, and real estate in a "devious" scheme to defraud the government, officials said. Miller was recently convicted of bank fraud, aggravated identity theft, and unlawful monetary transactions for approximately 50 fraudulent applications and sentenced this week.

Miller illegally secured funding through the Payment Protection Program (PPP), for Economic Injury and Disaster Loans (EIDLs), and for Pandemic Unemployment Assistance (PUA) benefits, according to U.S. Attorney Gerard M. Karam.

Some of the applications submitted by Miller were filed on behalf of corporate entities under his control that did not, in fact, have actual business operations, a news release reported. The business operations bore false addresses, false IRS-issued Employee Identification Numbers, false dates of business establishment and operation, false employee headcount information, and fabricated gross income, gross receipts, and payroll obligation information.

The applications also included forged IRS income tax returns, and federal employment tax documents, the U.S. attorney said. Miller also failed to disclose in the applications that he was previously convicted of a felony.

Miller also filed fraudulent applications on behalf of himself and numerous family members, friends and associates, the news release said. In exchange, he received cash kickbacks from those individuals.

Through his scheme, Miller and his associates secured over $2.1 million in pandemic stimulus funds, according to Karam. Instead of using his funds on business expenses, as intended, Miller used them to purchase automobiles, vacations, and real estate, among other personal expenses.

In pronouncing the sentence, Judge Julia Munley labeled Miller’s criminal activities a “devious, extensive, and elaborate scheme to swindle the United States government,” and highlighted how, after the FBI executed a search warrant at his residence, Miller and his wife fled to South Carolina, where he lived under an assumed name until being apprehended," the Department of Justice reported. In addition to the sentence of imprisonment, Judge Munley also sentenced Miller to five years of supervised release, following his term of imprisonment, and to pay full restitution.

The PPP and EIDL programs, both funded by the March 2020 CARES Act, were designed to help small businesses facing financial difficulties during the COVID-19 pandemic. PPP funds were offered in forgivable loans, provided that certain criteria are met, including use of the funds for employee payroll, mortgage interest, lease, and utilities expenses. EIDL funds are offered in low-interest rate loans, designated for specific business expenses, such as fixed debts, payroll, and business obligation.

The PUA program was created by the CARES Act, as part of the United States government’s efforts to mitigate the impact of the COVID-19 pandemic on the public’s health and economic well-being. The PUA program was designed to provide unemployment benefits to individuals not eligible for regular unemployment compensation or extended unemployment benefits, the release said.

In addition to Miller, the United States prosecuted Robert Reynolds, also of Newfoundland, Pennsylvania, for obtaining fraudulent PUA benefits with Miller. Reynolds pleaded guilty to wire fraud and awaits sentencing, Karam said.