Source: Office of United States Attorneys
ST. LOUIS – U.S. District Judge Sarah E. Pitlyk on Tuesday sentenced a Farmington, Missouri business owner who committed bank fraud, Clean Air Act violations and witness tampering to 108 months in prison.
Judge Pitlyk also ordered Christopher Lee Carroll, 55, to pay restitution of $3 million.
Carroll was convicted by a jury in August of three counts of bank fraud, three counts of making false statements to a financial institution, one count of conspiracy to violate the Clean Air Act, 13 violations of the Clean Air Act and two counts of threatening a witness.
Evidence and testimony at trial showed that Carroll and his business partner, George Reed, were owners of a time share exit company called Square One Group LLC. In April of 2020, they submitted a false and fraudulent application for a $1.2 million Paycheck Protection Program (PPP) loan. The loan application falsely stated that the spouses of Reed and Carroll owned the company in order to conceal Carroll’s status as a paroled felon, which would have precluded his company from receiving PPP funds. Carroll also used his wife’s name to avoid any potential liability for the fraud, a sentencing memo filed by prosecutors says.
The PPP loan was supposed to help save businesses and jobs, but Carroll did not use the money to pay dozens of employees who were out of work or keep paying for health insurance for 17 of those employees. Instead, he used it to start a trucking company, Whiskey Dix Big Truck Repair LLC. Carroll and Reed then applied for loan forgiveness, falsely claiming that they’d spent the money on payroll and other permitted expenses.
Reed and Carroll later sought a second loan of more than $1.6 million, taking a total of $660,000 in “owner draws” from the company after the loan was approved, the evidence showed.
The Clean Air Act violations relate to emissions control equipment designed to reduce pollutants. Carroll had that equipment taken off Whiskey Dix’s fleet of diesel trucks. Carroll asked one employee to “take the fall” for his crimes and told another that he would stop paying for the employee’s lawyer if he talked to federal agents, evidence and testimony showed. Carroll did stop paying for the lawyer.
Carroll is a “consummate fraudster,” the government sentencing memo says, who ran a company that preyed on elderly victims before committing the pandemic loan fraud and other crimes. Carroll is also “a dangerous, violent person,” the memo says, citing prior convictions including felonious restraint and forcible sodomy and evidence of Carroll’s participation in a murder-for-hire scheme.
“This prosecution reinforces our office’s priority of going after the worst pandemic fraudsters,” said U.S. Attorney Sayler A. Fleming. “People like Christopher Carroll took advantage of a once-in-a-generation crisis to enrich themselves at the expense of struggling Americans. This office will continue to make sure that defendants like Carroll are held accountable to the fullest extent of the law.”
“This latest conviction is the tip of the iceberg for this career criminal,” said FBI St. Louis Special Agent in Charge Ashley Johnson. “In addition to defrauding the taxpayer-funded loan program in this latest case, Chris Carroll bailed on customers to line his own pockets with the millions of dollars they paid him to help exit timeshares. Furthermore, Carroll’s violent criminal history includes being a convicted sex offender for forcible sodomy.”
Whiskey Dix was also found guilty of 16 Clean Air Act violations. Judge Pitlyk sentenced the company to three years of probation.
Reed, now 70, pleaded guilty to bank fraud in September of 2022 and admitted fraudulently applying for, obtaining and using the two PPP loans. Reed admitted as part of his guilty plea that the company failed to pay a “significant number” of employees, despite the PPP loans, and that Carroll terminated the health insurance benefits of at least 17 employees. Reed was sentenced last month to time served and ordered to pay $3 million in restitution.
The FBI and the U.S. Environmental Protection Agency Criminal Investigation Division investigated the case. Assistant U.S. Attorneys Gwendolyn Carroll and Kyle Bateman prosecuted the case.