Aurora man imprisoned for defrauding federal government of pandemic relief funds
A 39-year-old Aurora man was sentenced to five and half years in federal prison Friday for money laundering and wire fraud related to his illicit acquisition of federal relief funds intended for businesses struggling to stay afloat during the COVID-19 outbreak.
Russell Ray Foreman filled out seven applications for federal funds between March 29, 2020 and October 6, 2020, according to the grand jury's indictment. That indictment was filed in May of 2021. In it, 13 counts were leveled against Foreman.
All of Foreman's applications contained false information, it stated.
Foreman made a plea agreement with prosecutors in March of this year, admitting guilt to two of the charges. Foreman is also ordered by the agreement and Friday's sentencing to repay more than $367,000 back to the government.
"Today's sentencing is a direct reflection of IRS Criminal Investigation's commitment to investigating individuals who lined their pockets with Covid relief funds," Andy Tsui, Special Agent in Charge, IRS Criminal Investigation Denver Field Office, stated in a press release sent out Friday. "IRS Criminal Investigation has a 100% conviction rate for Covid relief fraud investigations prosecuted in federal court, and we will continue to hold criminals accountable that divert money intended for legitimate businesses."
According to the indictment, Foreman applied electronically for Economic Injury Disaster Loan and Paycheck Protection Program funds, both authorized by the federal government's passage of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act in early 2020.
As explained in the indictment:
Applicants had to certify that the information in the application was true and correct, under the penalty of perjury and applicable criminal statutes. The application process involved filling out data fields relating to the size and ownership of the affected business entity, and other information about the relevant business for the 12 months prior to COVID-19 impacting the national economy, such as the number of employees in the business, the gross business revenues realized, and the cost of goods sold. This information, submitted by the applicant, was then used by SBA (Small Business Administration) systems to calculate the amount of money the applicant was eligible to receive.
The loans could be used by the business to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the COVID-19 disaster not occurred.
Foreman filed applications as the owner of several businesses, some named after himself, others using the names ECS Consulting LLC, Grand Luxury Marketing, Quantum Boost Technology.
Foreman also filed EIN numbers with federal government and tried to register businesses with the state of Colorado under those EINs using a colleague's name as owner but showing Foreman's address. The pair's first company was called Fusion Group, but they also used the names Vegisir Consults LLC and Vegvisir Consults LLC. The men applied for EIDL loans, received them, and then withdrew funds or transferred them to personal accounts.
Foreman's colleague in the case, 30-year-old Chandler Simbeck of Golden, was unaccounted for earlier this year. He was identified as a fugitive by prosecutors in March. Since then, Simbeck has been jailed in Larimer County on drug charges.
Friday, as Foreman was sentenced, prosecutors filed a request to obtain custody of Simbeck as soon as his proceedings in Larimer County are concluded. Simbeck is scheduled for a disposition hearing in Larimer County the first week of September.