A Hilo man has been sentenced in federal court to 42 months in prison for wire fraud in connection with a plot to defraud the federal government of program funds earmarked for COVID-19-related relief efforts.
Carey Mills, 47, pled guilty on May 17, 2022 on a single count information basis. In addition to a prison sentence, Chief US District Judge Derrick K. Watson also imposed a five-year supervised sentence and ordered Mills to pay a $937,575 restitution to the Small Business Administration.
The Paycheck Protection Program is a federal loan program designed to help small businesses survive the COVID-19 pandemic by providing them with funds to cover certain payroll costs, including benefits, mortgage interest, rent and utilities. The Economic Injury Disaster Loan is a separate federal program that provides low-interest loans and grants to small businesses experiencing significant financial disruption due to federally declared disasters, including the COVID-19 pandemic.
According to court documents and information presented in court, from May through August 2020, Mills filed multiple applications for PPP and EIDL funds on behalf of three companies under its control, Kanaka Maoli Hoʻokupu Center, New Way Horizon Travel, and the Uilani Kawailehua Foundation, according to the Times interstate lines.
To support the requests, court documents indicate that Mills filed fraudulent payroll documents and IRS forms that contained false records of employees and wage payments. As a result of those filings, Mills received $937,575 in three forgivable PPP loans and an EIDL grant, to which information presented in court indicated that he was not entitled.
At the sentencing hearing, prosecutors argued that Mills used the federal aid money to fund personal expenses, including the purchase of eight vehicles and two homes. When Chief Justice Watson delivered the verdict, he said, “Stealing a million dollars in federal funds is no joke.”
“Carey Mills stole federal funds that provided a lifeline to our small businesses struggling as a result of the COVID-19 pandemic,” said US Attorney Clare E. Connors. “While this is the District of Hawaii’s first conviction for fraud under the COVID-19 program, the Department is committed to investigating and prosecuting those who, like Mills, are both small businesses who need these PPP and EIDL funds , as well as the taxpayers who do so, have supported these programs.”
“The Treasury Department’s Inspector General for Tax Administration is aggressively pursuing those who seek to abuse the Coronavirus Aid, Relief, and Economic Security Act and its Paycheck Protection Program, which was created to assist legitimate business owners during the pandemic,” said J. Russell George, Financial Inspector General for Tax Administration. “We appreciate the efforts of our law enforcement partners and the United States Attorney’s Office to ensure that those involved in criminal activity are held accountable.”
The investigation was conducted by the US Treasury Department’s Inspector General for Tax Administration along with the Federal Deposit Insurance Corporation Office of the Inspector General, the Small Business Administration Office of the Inspector General and Homeland Security Investigations. Assistant US Attorneys Rebecca M. Perlmutter and Gregg Paris Yates accepted the charge.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to pool the resources of the Department of Justice in partnership with agencies across government to increase efforts to combat and prevent pandemic-related fraud. The task force is increasing efforts to identify and prosecute the most guilty domestic and international criminal actors and assisting agencies tasked with administering fraud prevention assistance programs, including by expanding and incorporating existing coordination mechanisms, identifying resources and techniques for detecting fraudulent actors and their systems, and sharing and utilizing information and lessons learned from previous enforcement efforts.