Commerce Township Man Sentenced in Pandemic Relief Fraud Scheme

DETROIT - Commerce Township resident Ryan T. Carruthers was sentenced to two years and three months in prison yesterday for defrauding the Small Business Administration and various banks out of approximately $851,000 as part of a pandemic relief fraud scheme, announced United States Attorney Dawn N. Ison. Carruthers was also ordered to pay $851,963 in restitution to his victims.

Ison was joined in the announcement by Angie Salazar, Special Agent in Charge of the Detroit Office of Homeland Security Investigations.

Ryan Carruthers, 42, pleaded guilty in August 2023 to one count of wire fraud before United States District Judge Paul D. Borman. The guilty plea arose out of Carruthers’ participation in a wide-ranging scheme to obtain loans to which he was not entitled from two pandemic relief programs overseen by the Small Business Administration (SBA). 

According to plea documents, in approximately April 2020, Carruthers began to submit electronic applications for pandemic relief loans in the names of various business entities he purported to own and control. Between April 2020 and April 2021, Carruthers submitted numerous loan applications through the Paycheck Protection Program (PPP), which was an SBA-administered program that provided forgivable loans to businesses to encourage them to keep workers employed during the pandemic. Carruthers also submitted a loan application under the SBA’s Economic Injury Disaster Loan Program (EIDL), which was a program that provided low-interest financing to businesses adversely affected by the pandemic. The PPP loan applications were submitted to various participating lenders of the program, while the EIDL loan application went directly to the SBA.

According to the plea documents, the loan applications contained numerous material misrepresentations and false statements. Carruthers’s business entities were shells that existed on paper only; they had no revenue, employees, or ongoing operations of any sort. However, Carruthers claimed in his applications that each of these entities had between three and 15 employees. The average monthly payroll amounts included in the applications were fictitious, as were representations about how the money would be spent. According to Court documents, Carruthers spent the money on personal investments and expenses, including the acquisition of personal watercraft.

“Ryan Carruthers stole nearly a million dollars from programs intended to help our economy stay afloat during an unprecedented public health emergency,” said U.S. Attorney Ison.  “This prosecution reflects the seriousness with which my office takes this sort of fraud, and we will continue to pursue accountability for all of those who enrich themselves at the public’s expense.”

“This fraud goes against everything our community stands for,” said HSI Detroit Special Agent in Charge Angie M. Salazar. “Let this case be a warning to others who used these funds to line their own pockets. Our agents and partners are wholly committed to investigating these loans and ensuring that justice is served.”

The case was prosecuted by Assistant United States Attorney John K. Neal. The investigation was conducted by Homeland Security Investigations with the assistance of the Small Business Administration Office of Inspector General.