South-central Pa. man gets 1½ years in federal prison for PPP fraud

Staff report

A south-central Pennsylvania man used a defunct business to fraudulently claim nearly half a million dollars in COVID relief funds intended to preserve jobs during the pandemic.

In fact, Keith McConnell’s Carlisle-area trucking company, KB Transportation LLC, was not in business in 2019 and 2020, and he had no employees or payroll expenses when he applied for forgivable loans through the Paycheck Protection Program, according to the U.S. Attorney’s Office for the Middle District of Pennsylvania.

On June 5, 2020, the 43-year-old Carlisle man “falsely certified that KB Transportation LLC employed twenty-six employees and had monthly payroll expenses totaling $124,800. As a result of the fraud, McConnell received $312,000 in PPP loan proceeds, U.S. Attorney John C. Gurganus’ office stated in a news release.

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“Within weeks, McConnell spent the PPP funds on unauthorized expenditures including the purchase of a residential property, two personal vehicles, cash withdrawals, and stock market investments,” the release notes.

On Jan. 20, 2021, McConnell again used KB Transportation to apply for a second PPP loan in the amount of $155,200 and again submitted false and fraudulent loan applications and documents, according to the U.S. Attorney’s Office. The second loan was never dispersed.

McConnell was charged in June 2021 with perpetrating a wire fraud and money laundering scheme.

U.S. District Court Judge Christopher C. Conner sentenced him Tuesday to 18 months in prison. The judge also ordered McConnell to serve three years of supervised release and to pay $312,200 in restitution.

To date, according to the U.S. Attorney’s Office, McConnell has paid back $237,515.50.