https://www.cbsnews.com/detroit/news/metro-detroit-business-owner-ppp-money-laundering-scheme/

A Metro Detroit business owner has been indicted on fraud and money laundering charges relating to applications for the Paycheck Protection Program and the Economic Injury Disaster Loan program.

Karl A. Fultz is charged with one count of wire fraud, five counts of aggravated identity theft and three counts of transactional money laundering, according to the federal grand jury indictment. The court document filed in U.S. District Court, Eastern District of Michigan, cites actions that happened during 2020 and 2021 in Oakland and Wayne Counties.

A trial date is expected in July.

Fultz was listed as the owner of Wheel Effects, a business that designed and manufactured parts and accessories for bicycles; Karl Fultz Music, a record company; and Media Planet, a multi-media services provider.

The Paycheck Protection Program was created in March 2020 to provide emergency assistance to businesses that faced financial challenges at the outbreak of the COVID-19 pandemic. The Economic Injury Disaster Loan was also an option for some companies as the pandemic relief efforts ramped up. Both of these programs were run by the Small Business Administration, in partnership with certain financial institutions.

During the enrollment times, court documents allege, Fultz participated in a scheme meant to obtain money through those programs in a fraudulent manner.

Specifically, a financial assistance application filed in August 2020 claimed that Wheel Effects had 41 employees and an average monthly payroll of $346,676, "when in truth Wheel Effects had few, if any, employees."

There were even false 2019 W-2 forms filed on behalf of individuals who were not employees of Wheel Effects, in addition to false documents for 2019 Schedule C and Tax Form W-3, the court documents state. In support of some of that documentation, the names and Social Security numbers of multiple people were used without permission.

The money that was received on behalf of Wheel Effects was quickly spent, wired to or transferred to other accounts, the indictment alleges.

An assistance application filed in July 2020 on behalf of Fultz Music for the Economic Injury Disaster Loan claimed that the company had five employees at the time, and one filed in June 2021 said Fultz Music had 12 employees, the court records allege. SBA denied both applications.