Utah trucking company employee pleads guilty to PPP loan fraud

An employee for a Utah trucking company has pleaded guilty to her role in a fraud scheme involving the Paycheck Protection Program.

Lisa Bradshaw Rowberry, 49, of Provo, Utah, pleaded guilty in federal court to loan application fraud for unlawfully obtaining a federal Paycheck Protection Program loan, according to a news release from the U.S. Attorney’s Office for the District of Utah. Sentencing is set for July 7.

Rowberry worked for the Frisbu trucking company, owned by her co-defendant, Hubert Ivan Ugarte, who pleaded guilty to PPP loan fraud and federal bribery charges involving the Salt Lake City FedEx Ground Hub in federal court in April.

According to the plea agreement, Rowberry admitted to submitting a fraudulent loan application to Transportation Alliance Bank in Ogden, Utah, for PPP loans authorized by the Coronavirus Aid, Relief, and Economic Security Act. She fraudulently obtained $210,000 in PPP loans for Frisbu after failing to disclose on the loan application that Ugarte was under federal indictment for his role in a bribery scheme involving the FedEx Ground Hub.

Rowberry stated that she first met Ugarte while working as branch manager at a U.S. Bank branch in Utah where Ugarte was a customer, and that when she went to work for him she was aware he was under federal indictment for his role in a FedEx bribery scheme.

In the bribery case, Ugarte was convicted of fraud and money laundering charges for his involvement in a pay-to-play trucking scheme involving 10 defendants who paid approximately $1 million in bribes to the Utah FedEx Ground Hub manager in order to exploit the manager’s position with FedEx and make their trucking businesses as lucrative as possible.

In the plea agreement, Ugarte admitted to bribing the FedEx Ground senior linehaul manager, Ryan Lee Mower, with approximately $490,000.

This netted Ugarte’s trucking companies over $24 million during a seven-year period between 2012 and 2019. In order to carry out the scheme, Ugarte and Mower worked to obscure the ownership of Ugarte’s many trucking companies by filing false compliance reports with FedEx Ground in order to award Ugarte with more trucking routes than one business owner was entitled to under established policies.

In the second case involving PPP loan fraud, Ugarte pleaded guilty to submitting a fraudulent loan application to the Small Business Administration. Ugarte admitted that he fraudulently obtained $210,000 in PPP loans after failing to disclose that he was under federal indictment for his role in the fraudulent trucking scheme.

On May 14, 2020, Ugarte received $210,000 from Transportation Alliance Bank under the PPP. Instead of using at least 75% of the loan to pay payroll costs, including bounced payroll checks, Ugarte used 60% of the loan to pay the past due truck payments – leaving 40% for payroll costs.

Sentencing in both of Ugarte’s cases is set for June 3.

The CARES Act is a federal law enacted on March 29, 2020, to provide emergency financial assistance to millions of Americans suffering from the economic effects caused by the COVID-19 pandemic.

PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent and utilities. The program allows the interest and principal on the loan to be entirely forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses a certain amount of the loan proceeds on payroll expenses. LL