Utah Residents Accused of Running a COVID-19 Relief Fraud Scheme Face Federal Charges

SALT LAKE CITY, Utah – Three Tooele County residents accused of running a Paycheck Protection Program (PPP) loan fraud ring will appear before a U.S. Magistrate Judge today following a federal indictment. The indictment, returned by a grand jury on Feb. 28, 2024, includes charges of wire fraud and aiding and abetting during the COVID-19 pandemic. 

According to court documents, Halee Ann Mehlbauer, 38, Timothy George Lopez, 62, and Rick A. Bolton, 65, of Tooele, allegedly ran a PPP Loan fraud ring from July 2020 to January 2022. Mehlbauer, Lopez, and Bolton fraudulently applied for at least 10 PPP loan applications and five PPP loan forgiveness applications that attempted to defraud lenders and the Small Business Administration (SBA) of approximately $422,242.50. These were funds Congress allocated for the SBA to provide low-interest loans to eligible small businesses experiencing financial disruption due to the COVID-19 pandemic. 

When applying for the loans, Mehlbauer, Lopez, and Bolton used fictitious businesses that did not exist before the pandemic hit, and therefore did not qualify for PPP loans. The defendants also exaggerated and fabricated the number of employees, average monthly payroll, and gross income of their fictitious businesses. Mehlbauer, Lopez and Bolton also submitted fake tax forms and payroll tax forms to support their fabricated payroll and gross income. The defendants never filed the fake tax forms they submitted to their lenders with the IRS. Mehlbauer also transferred at least $49,475.02 of PPP loan funds to herself in checks. The defendants spent the rest of the fraudulently obtained PPP loan funds on unauthorized personal expenses, including debt payments, car expenses and gambling. 

By lying on the PPP loan applications, Mehlbauer, Lopez and Bolton fraudulently obtained at least approximately $195,930.50 in PPP loan funds and obtained forgiveness of at least approximately $155,477.50 of their approved PPP loans, that they were not eligible to receive.  

Mehlbauer, Lopez and Bolton are charged with seven counts of wire fraud and aiding and abetting. Mehlbauer is also charged with money laundering. Their initial court appearance on the indictment is scheduled for March 28, 2024, at 3:00 p.m. in courtroom 8.4 before a U.S. Magistrate Judge at the Orrin G. Hatch United States District Courthouse in downtown Salt Lake City. 

U.S. Attorney, Trina A. Higgins, of the District of Utah made the announcement.

Assistant United States Attorney Todd C. Bouton of the U.S. Attorney’s Office for the District of Utah is prosecuting the case. 

The Utah Federal COVID-19 Fraud Strike Force is investigating the case, which includes Homeland Security Investigations (HSI), the Federal Bureau of Investigation (FBI), the Office of Inspector General’s U.S. Small Business Administration – Office of Inspector General (SBA-OIG), Department of Defense (DOD), U.S. Department of Housing and Urban Development (HUD), U.S. Department of Labor (DOL), and the U.S. Treasury Inspector General for Tax Administration (TIGTA). The public is encouraged to share information about the abuse of the Paycheck Protection Program or other SBA programs by submitting a complaint here.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus and https://www.justice.gov/coronavirus/combatingfraud.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.