Appeals court affirms convictions, sentence of Casey Crowther for COVID-relief and mortgage fraud
The convictions and sentence of Casey David Crowther, 37, of Fort Myers, on fraud charges related to Covid-19 relief funds have been affirmed by the U.S. Court of Appeals for the Eleventh Circuit in Atlanta in one of the first federal appeals involving a fraudulent COVID-relief loan case.
Crowther was found guilty in March 2021 by a federal jury in Fort Myers on charges of bank fraud, making a false statement to a lending institution, and two counts of money laundering in connection with a Paycheck Protection Program loan scheme.
Before trial, Crowther had pleaded guilty to other bank-fraud and false-statement charges related to a separate scheme in which Crowther had created fake bank statements to justify a loan for a nearly $1.3 million waterfront house in St. James City, Florida.
United States District Judge John E. Steele sentenced Crowther to 37 months in prison and three years of supervised release.
According to the U.S. Bureau of Prisons Crowther was released from Federal Prison Camp Montgomery at Maxwell Air Force Base in Montgomery, Alabama, December 14, 2022, almost 18 months into his sentence.
"Casey David Crowther completed his prison sentence for the charges in this case," a spokesman for the United States Attorney's Office for the Middle District of Florida said. "He will not be returning to prison related to the Eleventh Circuit’s recent opinion."
Crowther submitted his notice of appeal of his case to the Court of Appeals shortly after his conviction.
In his appeal Crowther argued that he was permitted to use PPP funds for any purpose —notwithstanding unambiguous restrictions in the loan documents that he signed — so long as he intended to repay the loan. The Eleventh Circuit rejected Crowther’s arguments and affirmed his convictions and sentence.
Congress created the Paycheck Protection Program to facilitate up to $349 billion in low-interest, potentially forgivable loans for qualified businesses struggling to make payroll or pay operating expenses in the early days of the COVID-19 pandemic.
PPP loans were provided by private lenders and guaranteed by the Small Business Association and could be used only for payroll and certain other expenses necessary to maintain business operations during the pandemic (primarily payroll).
In April 2020, Crowther obtained a $2.1 million PPP loan by stating that he intended to use the money for payroll, rent, and utilities for his company, Target Roofing and Sheet Metal, Inc.
According to the evidence presented at trial, he instructed his bank to deposit the funds into a secret account separate from his company’s main operating account. He quickly used the account for personal use, spending nearly $700,000 on a 40-foot pleasure boat and $55,000 on a horse.
He also used PPP funds to pay down personal credit-card debt, a loan owed to an old business partner, and his company’s line of credit (which were not permitted uses).
When Crowther’s bank warned him that he was likely to be audited, he attempted to conceal his fraud by falsely “hiring” family members and dozens of fictitious employees to inflate his company’s apparent payroll.
He hid the true purpose of certain wire transfers (saying that the boat payment was an “equipment purchase” and the horse payment was for “roofing material”).
All the while, taxpayers continued to fund the low-interest loan that had been intended to protect Crowther’s business and employees.
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