Los Angeles woman sentenced to 5 years for $2.3 million COVID loan scheme

A 39-year-old Los Angeles woman was sentenced to five years in federal prison for fraudulently obtaining $2.3 million in COVID-19 government loans through 20 existing and newly created businesses, the Justice Department announced Friday.

From June 2020 to December 2021, Casie Hynes from the Mid-City area, submitted more than 80 fraudulent applications for Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) from banks and the United States Small Business Administration (SBA). 

She also submitted false claims to the IRS, trying to secure nearly $1.3 million in pandemic-related tax credits using fabricated tax documents and bank statements, according to the Justice Department.

"The defendant exploited a crisis to line her own pockets, diverting vital relief funds from businesses that needed the money," said Acting United States Attorney Joseph McNally.   

During the tax years 2020 and 2021, the IRS offered the Employee Retention Credit and paid sick and family leave credit to businesses that were significantly impacted by COVID-19.

Hynes' bogus government loan applications listed the names of companies said to be owned by her or friends and family members, often using personal information and signatures without consent.

She also provided false information on the applications, including the number of supposed employees at the companies, the companies' average monthly payroll, and who owned and controlled the sham businesses.

Banks and the SBA approved PPP and EIDL issued the loans based on application information for the created companies, and the COVID-19 relief funds went into bank accounts Hynes controlled and were used to pay for her own personal expenses.

In April 2024, Hynes pleaded guilty to one count of wire fraud and one count of false claims.  

She is also ordered to pay $2,376,168 in restitution.