CLARKSBURG, W.Va. — Two Morgantown business owners have either been sentenced or have entered guilty pleas in federal court for defrauding pandemic-era relief programs as part of a nationwide enforcement sweep totaling over $245 million in intended losses.
The investigation called, “Operation No Doze,” was a summer fraud takedown coordinated by the Department of Justice, the Small Business Administration (SBA) and the SBA Office of Inspector General across 40 federal districts.
James Baldwin II, 46, owner of Morgantown business Select Decks, was sentenced to 30 days in federal prison and ordered to pay $1,007,223 in restitution.
Federal prosecutors said Baldwin applied for and received $738,230 in Paycheck Protection Program (PPP) loans from multiple banks by falsifying loan documents for the business and three other businesses that were not in operation prior to the pandemic. He also obtained full loan forgiveness from the SBA.
Beginning in 2016, Baldwin withheld $258,993 in employment taxes from his employees’ paychecks, issuing W-2s reflecting the deductions, but failed to file required tax forms or remit any of the withheld money to the IRS.
In a separate federal case, Kurt Ly, 69, owner and operator of Vin Phat, Inc. in Morgantown, pleaded guilty to a scheme to defraud pandemic relief programs.
Ly obtained PPP loans, spent the funds on impermissible expenses and falsely certified to the SBA that the funds were used properly to obtain loan forgiveness.
Additionally, Ly secured a $146,600 Economic Injury Disaster Loan (EIDL) in August 2020 meant solely for business working capital. Instead, investigators found Ly used the money for personal expenses, including a $15,000 car payment, personal bank account transfers, and cryptocurrency investments.
“These defendants deliberately stole from programs funded by American taxpayers and intended to support legitimate small businesses,” said United States Attorney Matthew Harvey. “Our office will aggressively pursue those who misuse federal funds and will hold accountable anyone who attempts to defraud the United States.”
Federal officials said 160 arrests have been as a part of “Operation No Doze.”