Tooele woman sentenced for $177k in wire fraud tied to pandemic funds

SALT LAKE CITY — A Tooele woman has been sentenced to more than a year in prison for fraudulently obtaining more than $177,000 in small business funds during the COVID-19 pandemic.

Halee Ann Mehlbauer, 40, pleaded guilty to wire fraud and money laundering in September.

Between July 2020 and January 2022, she obtained $177,030 in COVID-19 Paycheck Protection Program loans for which she was not eligible, according to court documents. The federal government provided loans during the pandemic to help small businesses with specific funding, such as payroll support.

Mehlbauer gave false information on her loan applications, including providing fake documents and fabricated employee payroll records for nonexistent businesses, according to court documents. The money was then used on personal expenses, including gambling and debt payments, prosecutors say.

Mehlbauer was one of three Tooele residents charged in March 2024 who fraudulently applied for more than $400,000 in loans. The U.S. Attorney’s Office of Utah called her the “ringleader” of the fraud scheme.

Mehlbauer was sentenced on Dec. 23 to 15 months in prison, plus two years of probation. She was also ordered to pay $177,030 in restitution.

Her codefendant, Timothy Lopez, was sentenced in March to time served and two years of probation for two counts of wire fraud. He must pay $48,507 of restitution jointly with Mehlbauer, court documents state.

Charges against Rick Bolton, the third person indicted in the fraud, were dismissed in October. Prosecutors cited new information that indicates Bolton did not submit any fraudulent loan applications, but someone else had submitted them in his name.

“Mehlbauer fraudulently obtained funds meant for honest business owners faced with weathering the storm of a global pandemic and her fraud will not go unpunished. It is our hope her sentence deters others from taking advantage of government programs,” said U.S. Attorney for Utah Melissa Holyoak.