Business & Investment

Utah truck owners admit to fraudulent PPP loan program and bribe FedEx manager

The owner of a former Utah truck company bribed a former FedEx Ground manager in exchange for a favorable contract and pleaded guilty to a federal court for stealing a PPP loan program.

Hubert Ivan Ugarte, 52, from Draper, Utah, pleaded guilty to fraud and money laundering in the US District Court in Salt Lake City last week. Instead of running at least 45 delivery routes originating from the Salt Lake City hub, he told Ryan Lee Mower, a former FedEx Ground (FXG) senior line hall manager, about seven years from 2012 to 2019. Allowed to pay $ 490,000. Restrictions on routes allowed under FedExGround’s established policies.

A practice known in the contract shipping industry as “overscaling” is to automatically terminate Ugarte’s contract if discovered by, along with bribe payments to the FedEx Ground Manager. FXG, Memphis-based shipping and logistics giant FedEx Corp. (NYSE: FDX).

In exchange for payment, Ugarte’s 14 truck companies have earned over $ 24 million in seven years. Ugarte was one of 10 defendants who paid a bribe of about $ 1 million According to the lawn mower Federal Bureau of Investigation..

The prosecution claims that the trucking companies involved in the lawnmower project have raised a total of more than $ 280 million over a decade.

PPP loan scam

Ugarte also pleaded guilty to filing a fraudulent loan application Coronavirus to the Small Business Administration (SBA) through Aid, Relief and Economic Security (CARES) Act Paycheck protection program (PPP). The Allowed Loan Program was created to support mortgage interest, rent, and utility bills paid to employees by struggling businesses.

According to court documents, Ugarte mistakenly answered “no” when asked if he was held formal criminal liability in any of the jurisdictions when filling out a PPP loan application. It was. According to the indictment, Ugarte began a two-year pretrial diversion in 1988 to resolve the alleged felony drug possession, but answered no when asked if it was placed in the pretrial diversion. ..

Utah’s PPP loan application was rejected or rejected by two banks after both companies discovered that they had been indicted in a federal indictment in an FXG mortgage case, according to court filings, but one of his companies. Received a $ 210,000 loan in a third attempt from Frisbu Trucking. May 2020, Transportation Alliance Bank (TAB) in Ogden, Utah.

As part of the PPP borrower’s terms, Ugarte agreed that 75% of the loan amount would be used for salary costs.

Before receiving PPP money, a former Frisb employee unnamed in court documents claims that Ugarte’s company was in financial difficulty and returned paychecks five times in 90 days. ..

Instead of spending 75% of its PPP loan on paying employees, Ugarte spent nearly $ 127,000 to pay overdue leases for 13 Kenworth trucks and purchase various truck parts.

Federal agents allege that Ugarte violated the PPP agreement, using 60% of the loan amount to pay Kenworth on the leased truck, leaving only 40% of the funds for salary.

A former Frisbu employee also claims that Ugarte has deposited an insurance check of about $ 61,000 for the destroyed 2016 Freightliner Cascadia into the shipping company’s bank account.

However, according to court filings, the money was to be handed over to the FBI as part of a seizure warrant in the FedEx case.

In November 2019, former Magistrate Judge Paul M. Warner issued a warrant permitting the seizure of 41 Ugarte trucks, but the 2016 Freightliner and several others were missing.

The court filing states that the 2016 Freightliner was involved in the October 2019 crash in Nevada and has been stored there since the accident. After paying the custody fee, Ugarte was instructed to hand over the remaining insurance money to the FBI, but that didn’t happen.

Ugarte will be sentenced on June 3 in both cases.

The status meeting for lawnmowers is set for May 13. There is no set trial date for the other nine defendants charged with the alleged kickback scheme.

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Utah truck owners admit to fraudulent PPP loan program and bribe FedEx manager

https://s29755.pcdn.co/news/utah-trucking-owner-admits-bribing-fedex-manager-defrauding-ppp-loan-program Utah truck owners admit to fraudulent PPP loan program and bribe FedEx manager

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