Woodford County man sentenced to 42 months for fraudulently obtaining COVID relief loans | USAO-EDKY

LEXINGTON, Ky.Versailles, Ky. man Randall “Rocky” Blankenship, Jr., 49, was sentenced to 42 months in federal prison on Thursday by U.S. District Judge Karen C. Caldwell, after pleading guilty to conspiracy to from committing wire fraud to obtaining Paycheck Protection Program loans under false pretences.

According to its plea agreement, in April 2020, Blankenship submitted four fraudulent applications for Paycheck Protection Program (PPP) loans for Blankenship RV Finance Solutions LLC, RSGG Properties LLC, RSGG Holdings LLC and RSGG Investments LLC, all business entities he has formed. The Paycheck Protection Program was created as part of the CARES Act, legislation passed in March 2020 in response to the COVID-19 pandemic. Paycheck Protection Program loans were designed to incentivize small businesses to keep workers on their payroll during the pandemic; these loans would be canceled by the US Small Business Administration, if the borrower determined that the loan proceeds were being used for payroll, rent, or other approved business expenses. The amount of the loan depended on the company’s payroll.

As part of his fraudulent PPP loan applications, Blankenship, with the help of an accountant, created false tax documents and payroll records indicating that his businesses had hundreds of thousands of dollars in quarterly payrolls; when in fact none of the entities had payroll expenses. Blankenship submitted the applications through Kentucky Bank and Independence Bank; and as a result, he obtained fraudulent PPP loans totaling $1,323,829. According to his plea, he used some of the funds for an RV business he owned (which had already received its own PPP loan and was ineligible for additional loans at the time), as well as for personal purposes, including paying off casino debt and buying real estate. Blankenship fully refunded the stolen funds.

In a related case before Judge Caldwell, accountant Tammy Jo Goodwin also pleaded guilty to conspiring with Blankenship to fraudulently obtain PPP loans. Goodwin’s sentencing is scheduled for September 26, 2022.

Under federal law, Blankenship must serve at least 85% of his prison sentence. Upon his release from prison, he will be placed under the supervision of the US Probation Office for three years. In addition to the jail sentence, Blankenship was ordered to pay a $30,000 fine.

Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky; Jodi Cohen, Special Agent in Charge, Federal Bureau of Investigation, Louisville Field Office; Kathy Enstrom, Special Agent in Charge, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG); and Stephen Donnelly, Acting Special Agent in Charge of the Eastern Region, Office of the Inspector General of the Federal Reserve Board of Governors and the Consumer Financial Protection Bureau (FRB), jointly announced the sentencing. The investigation was conducted by the FBI, FDIC-OIG and FRB. The United States was represented by Assistant United States Attorney Paul McCaffrey.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to mobilize Department of Justice resources in partnership with government agencies to scale up enforcement and prevention efforts. pandemic-related fraud. The task force strengthens efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies administering relief programs to prevent fraud, among other methods, by increasing and integrating coordination mechanisms existing ones, identifying resources and techniques to uncover fraudulent actors and their agendas, and sharing and leveraging information and knowledge gained from previous enforcement efforts. For more information about the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about alleged attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) hotline at 866-720-5721 or via NCDF’s online complaint form at: https://www. .justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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