Colorado Man En Route To Prison For Fraudulently Obtaining Nearly $900,000 In COVID Relief Funds
DENVER (CBS4) - A 50-year-old Highlands Ranch man, Daniel Stonebarger, was sentenced to 41 months in federal prison Thursday after he received nearly $900,000 in federal and state pandemic relief funds intended for struggling businesses.
Stonebarger lied on applications, according to the plea agreement in the case, and spent some of the received money on a car for his wife, plastic surgery for a relative, jewelry, travel and resort purchases, bridal expenses, a weight loss program and a Peloton exercise machine.
"This defendant was a criminal opportunist who took advantage of what he saw as easy money through programs created to keep businesses afloat during the pandemic," FBI Denver Special Agent in Charge Michael Schneider stated in a press release. "This outcome is a reminder that the FBI aggressively pursues those who try to defraud the federal government."
The plea agreement describes how Stonebarger applied for several loans beginning in April 2020, a month after the U.S. Small Business Administration made funds available through programs enacted or expanded by the Coronavirus Aid, Relief, and Economic Security ("CARES") Act passed by Congress in March. Those funds were permitted to be used for payroll, sick leave, production costs, and other business expenses.
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As detailed in the plea agreement, Stonebarger submitted applications for businesses called "Finish Armor LLC" and "You Want It Well (sic) Find It." The first "Finish Armor" application stated that the business had two employees. That number grew in subsequent applications to 48, and Stonebarger cited a monthly payroll of more than $327,000 in the last "Finish Armor" application.
Investigators eventually discovered Stonebarger tax identification number that was used for both businesses was created just three days prior to Stonebarger's first application. Furthermore, the registered business addresses led authorities to a UPS store and a senior assisted living center.
Stonebarger submitted multiple other applications under "DC4 Nano Finish," "Crooked Balls," and "Kahzz Agriculture" business names. All but one were denied.
Additionally, Stonebarger filled out applications for loans for three his wife's businesses. Most loans were denied, but almost $55,000 was granted and deposited into her personal bank account, according to the plea agreement.
Stonebarger claimed to submit those applications without his wife's knowledge. Federal prosecutors were unable to disprove that.
Nor were prosecutors able to do that regarding two applications submitted under the names of two businesses registered to Stonebarger's father in Idaho - including one which was incorporated two days before the application was submitted.
Stonebarger's father returned the full amount that had been deposited in his personal bank account to the federal government.
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In sum, Stonebarger fraudulently obtained $855,252.50 in funds from Economic Injury Disaster Loans and Grants (EIDLs and EIDGs), and Paycheck Protection Program (PPP) loans, plus another $28,142 from the state's Colorado Pandemic Unemployment Assistance.
Federal charges were filed against Stonebarger in November 2021. More than half a millions dollars in his bank account was seized, as was the 2016 Land Rover he had purchased for his wife and the $74,900 paid back by his father. In total, Stonebarger forfeited $822,794.50 in money and property as ordered by the court.
The judge ordered Stonebarger be subject to three years of supervised probation following his release from prison.
