Seattle Doctor Found Guilty of $3.5 Mil CARES Act Fraud
A Seattle doctor has been found guilty of fraudulently seeking at least $3.5 million in COVID-19 relief funds during the pandemic.
41-year-old Eric R. Shibley was convicted by a federal jury last week of submitting false loan applications for the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL). His charges include several counts of bank fraud, wire fraud, and money laundering.
Authorities allege that Shibley knowingly submitted false documents to several financial administrations including the Small Business Administration in order to obtain the COVID-19 relief funds. Officials also explained that Shibley knowingly bolstered the number of employees he had working at businesses that were either ineligible for the funds or were not in operation.
"To support the fraudulent applications, Shibley submitted fake tax documents and the names of purported employees who did not, in fact, work for the businesses for which Shibley claimed they worked,” the justice department explained. As a result of the fraudulent applications, officials detail that “Shibley received over $2.8 million in COVID-19 relief funds as a result of the fraud."
Much of the fraudulent loans were filed under the guise of a construction company that detailed a payroll of employees who did not work under the company. The construction company was also used as a front to open up several bank accounts.
In addition to lying on the loan applications about his eligibility for the funds, Shibley knowingly concealed his own criminal history. When asked on one of the loans if he had a criminal history, Shibley indicated that he did not when he in fact had been previously disciplined.
In 2020, the Washington Medical Commission (WMC) put a restriction on Shibley’s medical license after the doctor “improperly” prescribed controlled substances to nine of his patients between 2015 and 2016.
The WMC details that Shibley prescribed the medication in a manner that was “below the standard of care.” During the limitation on his license, Shibley was not allowed to prescribe controlled substances according to the WMC.
The Coronavirus Aid, Relief, and Economic Security Act (Cares Act) went into effect March 29, 2020, to help businesses that were struggling to stay open because of the pandemic. Since its inception, scammers ranging from individuals to highly organized entities were quick to defraud the government through the different loan programs it offered. Few states have launched a review into the distribution of the funds. Those that have identify that money allocated for aid has been misspent. California estimates that there has been $11 billion stolen from taxpayers, but that the number could be as high as $30 billion, or 27% of funds available.
According to NBCNews, a review by the Labor Department inspector general estimates that $63 billion of the $630 billion in aid has been misspent or fraudulently obtained.
Officials detail that Shibley is set to be sentenced on February 22 for his attempts to defraud the government. Shibley faces up to 30 years for each count of bank fraud, 20 years for each count of wire fraud, and 10 years for each count of money laundering.