Here is one way in which COVID-19 relief aid went up in smoke.
A pair of Missouri men have been charged with stealing $1.25 million in payroll protection loans to start a trucking firm, whose vehicles they modified in a way so they spewed out hundreds of times more pollution.
Christopher Carroll and George Reed had allegedly applied for the loans to help employees of a timeshare-exit company they ran called the Square One Group. But instead of using the money to keep employees on the payroll as intended, federal prosecutors say the men used the money to start a trucking business and buy a fleet of 30 diesel-powered trucks.
As part of the trucking business, the men allegedly created a company called Whiskey Dix Big Truck Repair in Bourbon, Mo. In addition, they used to tamper with their fleet to remove legally-mandated emissions control systems.
Some believe control systems hinder a truck's performance and make it more costly to operate. But the Environmental Protection Agency said it can cause trucks to produce 300 times more pollution than allowed.
Carroll and Reed were initially charged with stealing the COVID-19 relief aid in 2021, but later this week it was charged with violating the Clean Air Act for tampering with their trucks.
Carroll's lawyer, James G. Martin, said the government decided to bring the extra charges less than a week before his client was set to begin trial in the PPP fraud case.
We are extremely disappointed they included the alleged EPA violation to this case given that they agreed to settle similar charges with fines, Martin said. We believe that they're making this a criminal charge to pressure him because he has insisted on taking the case to trial. A message left by Reed's lawyer was not immediately returned.
In 2022, the Department of Justice filed civil charges against the company's timeshare-exit business, alleging that they force-armed mostly elderly customers into paying high prices for help getting out of timeshare contracts, which was often not provided.
Prosecutors claim that the men applied for $1.6 million of PPP loans to keep their salespeople on the payroll. In court documents, Square One Group paid most of its employees commissions based on their sales rather than salaries, and the firm continued to do so after receiving $1.2 million in government loans.
When Carroll instructs Square One's chief financial officer to file the loan applications, he allegedly described the money as $1.6 million in free dollars.
Despite receiving the cash, Carroll and Reed are accused of cutting their staff's health care after sales dipped sharply after the pandemic began.
The Prosecutors allege that the men lied in their application by naming Carroll's wife as a principal instead of Carroll himself because he had a prior felony conviction for a sexual assault that resulted in him being listed as a level three sex offender. People with felony records were ineligible to receive PPP loans. The trial heard that Carroll's wife did not have a role in the company.
Instead of using the PPP loans to assist their employees, Carroll and Reed used the money to launch the trucking business and acquire the fleet of 30 trucks.