Source: US FBI
Yakima, Washington – Acting United States Attorney Richard R Barker announced that David Kurt Schneider, of Kennewick, Washington and Kelly Jo Driver, of South Carolina, were sentenced after pleading guilty to COVID-19 relief fraud. Chief United States District Judge Stanley A. Bastian sentenced Schneider to 12 months in prison and Driver to 5 years of probation. Chief Judge Bastian also ordered restitution of $121,762.
Co-defendant, Leif Gerald Larsen, of Pasco, Washington, has pleaded guilty to wire fraud and will be sentenced July 30, 2025, in Yakima.
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act provided a number of programs through which eligible small businesses could request and obtain relief funding intended to mitigate the economic impacts of the pandemic for small and local businesses. One such program, the Paycheck Protection Program (PPP), provided government-backed funding to small businesses which could be forgiven so long as the proceeds were used for payroll and other eligible expenses. Another program, the Economic Injury Disaster Loan (EIDL) program, provided low interest loans that could be deferred until the conclusion of the pandemic to provide “bridge” funding for small businesses to maintain their operations during shutdowns and other economic circumstances caused by the pandemic. The PPP and EIDL programs have provided billions of dollars in aid, the vast majority of which have not been paid back, including hundreds of millions of dollars disbursed within Eastern Washington.
According to court documents and information presented at the sentencing hearing, Schneider, Driver, and Larsen submitted funding applications in the name of Larsen Firearms, owned by Larsen, and Solar Mobility LLC, RealNZ Water LLC, and Tempest Tactical Solutions, LLC, all owned by Schneider. Driver created fraudulent payroll and tax forms that were submitted in support of the applications, and that, for her part in the scheme, Driver received 10% of the funds disbursed by the SBA and participating lenders.
In total, Schneider, Driver, and Larsen fraudulently obtained at least $292,000 in CARES Act funding through the PPP and EIDL programs and submitted fraudulent applications seeking at least an additional $560,000 in CARES Act funding that were ultimately not approved.
“Pandemic relief programs were created to support workers, small businesses, and communities struggling through an unprecedented crisis – not to enrich fraudsters,” said Acting U.S. Attorney Rich Barker. “By stealing nearly $300,000 intended for legitimate businesses, these defendants diverted critical resources at a time when many businesses were fighting to survive. The SBA, FBI, the U.S. Attorney’s Office will continue to hold accountable those who exploit government aid for personal gain.”
“Those who exploited SBA’s pandemic relief programs for personal gain will be held accountable,” said SBA OIG’s Western Region Assistant Special Agent in Charge, Tim Larson. “SBA OIG continues to prioritize fraud investigations involving pandemic-era programs, working closely with the U.S. Attorney’s Office and our law enforcement partners to protect taxpayer funds and uphold the integrity of federal relief efforts.”
This case was investigated by the Eastern District of Washington COVID-19 Fraud Strike Force and by FBI and SBA OIG. This case was prosecuted by Assistant United States Attorneys Jeremy J. Kelley and Frieda K. Zimmerman.
4:24-cr-06004-SAB