PORTLAND, Ore. (KOIN) — A Vancouver real estate developer has been sentenced to federal prison for securing and laundering COVID-19 relief funds meant for small businesses.
On Friday, 62-year-old Michael DeFrees was sentenced to 21 months in prison and an additional five years of supervised release for using false pretenses when applying for the Small Business Administration’s pandemic recovery programs.
The U.S. Attorney’s Office for the District of Oregon said he submitted multiple applications for the Paycheck Protection Program and Economic Injury Disaster Loans between April 2020 and April 2022. DeFrees additionally submitted loan applications to two Washington Banks.
According to the Attorney’s Office, the man claimed to be the sole owner of the construction company Gateway National Corporation and real estate development company Yacht Harbor. He also claimed that he hadn’t been convicted of a crime or placed on parole or probation.
However, officials reported that DeFrees had been on probation because he was found guilty of falsifying business records in 2017.
In the recent case, officials said he used loan payouts to launder money through a third business for his personal expenses.
DeFrees was charged with bank fraud, money laundering and two counts of wire fraud in May 2022. He was convicted of all four charges in October of last year.
“Michael DeFrees’s crimes demonstrated his indifference to both the many businesses suffering the economic effects of the COVID-19 pandemic and American taxpayers who funded the relief programs created to alleviate these impacts,” USAO Chief of the Economic Crimes Unit Ethan Knight said in a statement.
“Prosecuting COVID-19 fraud remains a top priority for the Department of Justice and our partners," he added.
Along with DeFrees' conviction and recent sentencing, he was ordered to forfeit $1.2 million and pay the SBA $1.3 million in restitution.