• Fri. Feb 23rd, 2024

    Vancouver Real Estate Developer Sentenced for COVID-19 Relief Fund Fraud

    ByEmma Wolukau-Wanambwa

    Feb 10, 2024
    Vancouver Real Estate Developer Sentenced for COVID-19 Relief Fund Fraud

    A prominent real estate developer from Vancouver, Michael DeFrees, has been handed a 21-month federal prison sentence for obtaining and laundering funds intended for small businesses in need of COVID-19 relief. The sentencing also includes an additional five years of supervised release. DeFrees was found guilty of applying under false pretenses for the Small Business Administration’s pandemic recovery programs.

    Between April 2020 and April 2022, DeFrees submitted multiple applications for the Paycheck Protection Program and Economic Injury Disaster Loans. He also applied for loans at two Washington Banks. In these applications, DeFrees falsely claimed sole ownership of both Gateway National Corporation, a construction company, and Yacht Harbor, a real estate development company. Moreover, he deceitfully attested that he had no prior criminal convictions or involvement with probation or parole.

    However, it was revealed that DeFrees had previously been on probation for falsifying business records back in 2017. This discrepancy further exposed his fraudulent activities. Authorities also found that DeFrees had used the loan funds to launder money through a third-party business, diverting the funds for his personal expenses.

    DeFrees faced charges of bank fraud, money laundering, and two counts of wire fraud, all of which he was convicted for in October of the previous year. The U.S. Attorney’s Office for the District of Oregon expressed their concern over DeFrees’ callousness towards the businesses struggling as a result of the pandemic and the taxpayers who funded the relief programs.

    The Department of Justice, along with its partners, reiterated their commitment to prosecuting instances of COVID-19 relief fund fraud. As a part of DeFrees’ sentencing, he has also been ordered to forfeit $1.2 million and repay $1.3 million to the Small Business Administration as restitution. This case serves as a reminder of the importance of maintaining the integrity of relief programs in times of crisis and the consequences awaiting those who attempt to exploit them for personal gain.

    Frequently Asked Questions about Real Estate Developer Michael DeFrees’ COVID-19 Relief Fund Fraud:

    Q: Who is Michael DeFrees?

    A: Michael DeFrees is a prominent real estate developer from Vancouver.

    Q: What is the sentence given to Michael DeFrees?

    A: Michael DeFrees has been handed a 21-month federal prison sentence and an additional five years of supervised release.

    Q: What was Michael DeFrees found guilty of?

    A: Michael DeFrees was found guilty of obtaining and laundering funds intended for small businesses in need of COVID-19 relief. He applied for the Small Business Administration’s pandemic recovery programs under false pretenses.

    Q: What programs did Michael DeFrees apply for?

    A: Between April 2020 and April 2022, Michael DeFrees submitted multiple applications for the Paycheck Protection Program and Economic Injury Disaster Loans.

    Q: What false claims did Michael DeFrees make in his loan applications?

    A: Michael DeFrees falsely claimed sole ownership of both Gateway National Corporation, a construction company, and Yacht Harbor, a real estate development company. He also falsely attested that he had no prior criminal convictions or involvement with probation or parole.

    Q: What previous criminal activity was discovered about Michael DeFrees?

    A: It was revealed that Michael DeFrees had previously been on probation for falsifying business records in 2017.

    Q: How did Michael DeFrees launder the loan funds?

    A: Michael DeFrees used a third-party business to launder the loan funds, diverting them for his personal expenses.

    Q: What charges was Michael DeFrees convicted for?

    A: Michael DeFrees was convicted for bank fraud, money laundering, and two counts of wire fraud.

    Q: What are the consequences of Michael DeFrees’ actions?

    A: As part of his sentencing, Michael DeFrees has been ordered to forfeit $1.2 million and repay $1.3 million to the Small Business Administration as restitution.

    Q: What is the message behind this case?

    A: This case highlights the importance of maintaining the integrity of relief programs during times of crisis and warns of the consequences for those who attempt to exploit them for personal gain.

    Key Terms:
    – Paycheck Protection Program: A U.S. Small Business Administration loan program established to provide financial assistance to small businesses during the COVID-19 pandemic.
    – Economic Injury Disaster Loans: Loans provided by the U.S. Small Business Administration to businesses affected by a declared disaster, such as the COVID-19 pandemic.
    – Bank fraud: The fraudulent acquisition of funds or assets from a bank or financial institution.
    – Money laundering: The process of making illegally obtained proceeds appear legal by passing them through a complex sequence of banking transfers or commercial transactions.
    – Wire fraud: Fraudulent activity that involves electronic communications, such as phone calls or emails, to deceive individuals or entities for financial gain.

    Related Links:
    Justice.gov
    SBA.gov