Utah Trucking Company Owner Faces P3 Fraud Charges

Utah trucking company owner faces multiple charges after federal prosecutors alleged he submitted a fraudulent loan application to obtain funds from the US Small Business Administration Paycheque Protection Program (PPP).

Hubert Ivan Ugarte, 52, of Draper, Utah, owner of Frisbu Trucking Inc., is currently owned by the federal government. Prosecutors also allege that Lisa Bradshaw Rowberry, 49, of Provo, Utah, controller of Frisbu, helped him apply for a PPP loan through the CARES Act, which was signed by President Donald Trump and was designed to help businesses to stay afloat during COVID. -19 pandemic.

Ugarte, who is already indicted in another federal case involving a $ 280 million pay-to-play FedEx Ground corruption scheme, received a loan of $ 210,000 under the PPP in mid-May. The forgivable loan program was introduced to help struggling businesses pay employees, mortgage interest, rent, and utilities.

According to court documents, Ugarte and Rowberry, who handled Frisbu’s finances, falsely answered no when asked if Ugarte was the subject of formal criminal charges in any jurisdiction when completing the application for PPP loan. Ugarte also said no when asked if he had been placed in pre-trial diversion, which federal prosecutors also say is false because he entered into a two-year interim diversion to resolve a possession charge. drug for crime in 1988.

Documents filed by the court indicate that Ugarte’s PPP loan application was turned down or denied by two banks after it was discovered that he was facing a federal indictment in the FedEx corruption case, but that Rowberry contacted a “friend she knew in the banking industry to reapply for a PPP loan.” “

In Ugarte and Rowberry’s third attempt to submit their PPP application, Frisbu Trucking received a loan of $ 210,000 from the Transportation Alliance Bank (TAB) of Ogden, Utah on May 14. Under the terms of the PPP borrower, Ugarte and Rowberry agreed that 75% of the loan amount would be used for staff costs.

Former employee informs federal government

Before receiving the PPP money, a former employee of a trucking company, who was not named in court documents, claims Ugarte’s company was in financial difficulty and returned paychecks five times over a 90 day period.

Instead of using 75% of the P3 money to pay employees, Ugarte used nearly $ 127,000 to make overdue lease payments on 13 Kenworth trucks, as well as various truck parts.

Federal investigators say Ugarte violated the PPP agreement by using 60% of the loan amount to pay Kenworth for the leased trucks, leaving only 40% of the funds for the payroll.

The former Frisbu employee also claims that Ugarte and Rowberry deposited an insurance check for nearly $ 61,000 for a destroyed 2016 Freightliner Cascadia into the trucking company’s bank account.

However, that money was supposed to be turned over to the FBI as part of the seizure warrant in the FedEx case, according to court documents. In November 2019, former Chief Justice Paul M. Warner issued a warrant authorizing the seizure of 41 Ugarte trucks, but the 2016 Freightliner and a few others were missing.

Court documents indicate that the 2016 Freightliner was involved in an October 2019 crash in Nevada and has been in storage there since the crash. After paying the storage fee, Ugarte and Rowberry were ordered to turn over the insurance balance to the FBI, but this did not happen.

According to a Statement of the United States Department of JusticeRowberry, who is out on bail, has a preliminary hearing scheduled for July 28.

She was also ordered to renounce the power of attorney relating to Ugarte’s involvement in several trucking companies. Court documents claim Ugarte gave Rowberry a power of attorney to run his businesses in case he was forced to flee the country to avoid going to jail in the FedEx fraud case.

A first appearance of Ugarte, who is still in detention, is scheduled for Tuesday before magistrate Daphne A. Oberg.

Ugarte and Rowberry are charged with conspiracy, removal of property to prevent foreclosure, loan application fraud, electronic fraud and money laundering, court documents show. Conspiracy and moving property to prevent foreclosures are each punishable by up to five years. Money laundering carries a penalty of 10 years and wire fraud can be up to 20 years. The count of fraud related to loan applications represents up to 30 years in prison and a fine of $ 1 million, according to the DOJ statement.

Payment case to play FedEx Ground

Prosecutors indicted Ugarte, along with several other trucking company executives, in an alleged “pay-to-play” corruption scheme involving former FedEx Ground (FXG) manager Ryan Lee Mower, of Bountiful, Utah, in exchange for lucrative contracts in October 2019.

FXG is a subsidiary of FedEx Corp. (NYSE: FDX).

Mower is accused of conspiring with Ugarte, who has been charged with four counts of wire fraud and six counts of money laundering in connection with the alleged bribery scheme. Ugarte owned and operated several trucking companies that had contracted with FedEx Ground. Prosecutors allege he received around $ 90 million in revenue over an eight-year period from FXG contracts and paid Mower around $ 490,000 in bribes.

Mower has been named in five federal indictments and faces 51 counts of allegedly “exploiting his position for financial gain.” He was the top executive of the FXG hub in Utah from 2008 to October 2019 and was responsible for overseeing the shipping giant’s contract service providers. Part of his job was to ensure that “every local trucking company complied with FXG policies and regulations,” according to the United States Attorney’s Office for the Utah District.

Prosecutors say the trucking companies involved in the program with Mower have raised more than $ 280 million over a 10-year period.

Read more articles from Clarissa Hawes of FreightWaves.
See related articles:
P3 loan can’t save Alabama carrier from bankruptcy
Trucking Company Owner Charged With P3 Loan Fraud, Ponzi Scheme
Carrier links bankruptcy to skyrocketing insurance rates and fatal accident

Source link

About Harold Shirley

Harold Shirley

Check Also

NYPD Disciplinary Files May Be Made Public, Court Rules

Top line In a major victory for advocates of criminal justice reform, an appeals court …

Leave a Reply

Your email address will not be published. Required fields are marked *