Trucking company owner pleads guilty in PPP loan fraud, tanker explosion cases
September 13, 2021
The owner of a California trucking company has reached a plea agreement with the federal government in two separate criminal cases: one dealing with Paycheck Protection Program loan fraud and another regarding a fatal tanker truck explosion.
On Aug. 23, Carl Bradley Johansson and the U.S. Attorney’s Office for the Central District of California filed a consolidated plea agreement to end two unrelated federal indictments against Johansson. One indictment filed in July accused Johansson of fraudulently obtaining more than $667,000 in Paycheck Protection Program COVID-19 pandemic relief funds for his trucking companies. Another indictment, filed in April 2018, alleged that Johansson illegally repaired cargo trucks, which resulted in three tanker explosions. Two of those explosions each ended with one person killed.
According to the plea agreement, Johansson will plead guilty to three counts in the 2018 criminal complaint: one count of conspiracy to defraud the United States, one count of welding without required certifications, and one count of tax evasion. Johansson also will plead guilty to two counts of conspiracy to commit bank fraud while on pre-trial release in the PPP loan fraud case.
Johansson faces a total 100-year maximum prison sentence for all counts. Additionally, up to five years of supervised release can be tacked on. Furthermore, he could pay a fine of $2.75 million or twice the gross gain or loss resulting from the offenses, whichever is greater. That does not include any restitution Johansson may have to pay.
PPP loan fraud
According to the indictment, Johansson applied for a PPP loan in April 2020 for his company Western Distribution, based in Ontario, Calif. He received a loan for more than $436,000 to be used to pay salaries for 21 employees. However, the employees mentioned in the loan application did not work for the company.
Johansson placed those individuals on Western Distribution payroll despite the fact they did not work there. Rather, they worked for other companies that Johansson owned and failed to mention in the loan application. Additionally, Johansson had his son falsely listed as the owner.
Funds from that PPP loan were spent in May and June 2020, mostly on expenses not related to the payroll.
In fact, not only did Johansson not use the loan to keep employees on staff, but he ended up laying off most the company’s employees, only to rehire most of them later that year.
Making matters worse, Johansson added his two sons on the payroll after receiving the PPP loan, making them the only employees on the payroll from April through August 2020.
Johansson filed for another PPP loan in April 2020. This time he was asking for nearly $300,000 for his Merced County-based business that is only identified as Company A in court documents. Despite Johansson and his wife having control of the company, Johansson’s 85-year-old mother was listed as the owner in the loan application.
After successfully defrauding the PPP loan system, Johansson repeated the same scheme with Western Distribution by applying for another loan for more than $230,000. That loan also was approved. He was eventually caught after fraudulently obtaining nearly $668,000 in loans.
Johansson was also the owner of Corona, Calif.-based National Distribution Services and Wholesale Distribution Inc. He was indicted on charges related to a fatal explosion that occurred in May 2014. A welder was dismembered and killed, with another seriously injured after a cargo tanker exploded.
According to the criminal complaint, National was not a cargo tank shop or repair facility registered with the U.S. Department of Transportation. Johansson was the owner of National and Wholesale, where he supervised Enrique Garcia, the shop manager at both companies as well. Garcia ordered at least two employees he supervised to conduct welding repairs that would eventually cause the explosion.
After the May 2014 fatal explosion, the Federal Motor Carrier Safety Administration issued National an emergency out-of-service order. Approximately 42 tankers were prohibited from operating.
National unsuccessfully challenged the out-of-serviceorder. It continued to operate some of the 42 banned tankers by creating a chameleon carrier called Wholesale Distribution. The reincarnated carrier had most of the same management and employees as National.
Johansson also created shell companies to suggest that the two welders were employed by a company called TankServices LLC. This and other shell companies also were used to avoid paying income taxes, court documents reveal.
In 1993, Johansson owned a company called Atlas Carrier. In a similar incident, an Atlas welder was killed while working inside a cargo tanker. Johansson and an Atlas manager were indicted on charges in June 1998. Johansson pleaded guilty to three of five counts. He was sentenced to 15 months imprisonment and two years supervised release. Later, Johansson started a company called Systems Logistics.
In 2012, National was involved in a separate tanker explosion caused by a welder doing illegal repairs. The explosion blew the dome lid on top of the tank into ceiling, causing a hole in the roof. LL