Utah trucking company owner accused of PPP fraud
Jul 8, 2020, 6:17 PM | Updated: Dec 30, 2022, 11:25 am
Draper, Utah — The owner of a Draper trucking company now faces federal fraud charges after prosecutors said he lied to get funds from the Payroll Protection Program (PPP), then misused the money after he got it.
When someone applies for a PPP loan they’re asked whether or not they’re under indictment for a crime. John Huber, the US Attorney for Utah, said Hubert Ugarte claimed he wasn’t under indictment when he applied for and eventually received $210 thousand.
“Ugarte is [indicted] in the District of Utah for federal fraud charges,” Huber said.
The previous indictment stems from an accusation claiming Ugarte bribed a Fed Ex Ground hub manager for more favorable routes for his trucking company last fall. Investigators say several trucking companies paid the Fed Ex employee more than $1 million. Ugarte was charged with six counts of money laundering and four counts of wire fraud.
Huber said the latest investigation into Ugarte started after a concerned citizen noticed questionable behavior.
“This case started with a tip. Special agents then followed up on it and found, sure enough, we have over $200 thousand of taxpayer money that we allege has been misused and they lied to get it in the first place,” Huber said.
Promised PPP money to employees
The complaint states that Ugarte, with the assistance of Lisa Rowberry of Provo, lied on the application. This after two banks rejected previous attempts. On the application, Ugarte reportedly promised to spend 75% of the money to keep his employees on the payroll. But Huber said that’s not where the money went.
“We have evidence and have alleged that Mr. Ugarte instead used the majority of those funds to pay off loans on his trucks,” Hubert said.
This kind of activity is something Huber says he and his team expected. Huber said they knew people would try to defraud the government as soon as the PPP was created in March. Shortly after the program was announced, Huber said he created a team of attorneys and investigators to look into possible cases of fraud.
“It a top priority in my office and, unfortunately, they’re pretty busy,” Huber said.
Both Ugarte and Rowberry are charged with conspiracy, loan application fraud, wire fraud and money laundering. The US Attorney’s Office said the sentence for the loan application fraud count could be up to 30 years in prison and a $1 million fine. Ugarte’s next court appearance is scheduled for July 14.