Iowa man sentenced to prison for disaster relief fraud
CEDAR RAPIDS, Iowa (AP) — An Armstrong man has been sentenced to more than three years in federal prison for receiving more than $1.3 million in loans in a fraud scheme involving federal programs offering help for coronavirus-related losses.
Donald Franklin Trosin, 57, was sentenced this week in Cedar Rapids’ federal court to 40 months in prison, federal prosecutors for Iowa said in a news release Tuesday. He was also ordered to pay $1.3 million in restitution to the government and lenders. Trosin had pleaded guilty in February to major fraud against the U.S. and money laundering conspiracy.
Federal prosecutors said Trosin was living in Champlin, Minnesota, when he conspired to launder funds from Paycheck Protection Program and Economic Injury Disaster loans he received from banks in northwest Iowa and Minnesota.
Prosecutors said Trosin admitted that he submitted more than 20 applications to the Small Business Administration, in his name and the name of another person, to receive the loans. Those funds are part of the federal CARES Act enacted in March 2020 to help people who suffered financial losses because of the COVID-19 pandemic.
The applications falsely claimed that Trosin had 120 employees on his payroll and over $5 million in payroll expenses when he did not actually operate a business.
After receiving the funds, Trosin wired proceeds to other people in other states, prosecutors said.