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Tampa Bay-Lakeland
Business Observer Tuesday, Jan. 18, 2022 4 months ago

Area resident gets federal prison for $800K COVID-19 relief fraud

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Louis Thornton III applied for federal relief funds in the names of defunct companies
by: Louis Llovio Commercial Real Estate Editor

TAMPA — A 63-year-old St. Petersburg man has been sentenced to three years and six months in federal prison for obtaining COVID-19 relief funds for companies no longer in business.

The sentence for the defendant, Louis Thornton III, also included an $814,000 judgement and five years of probation when sentenced by U.S. District Judge Susan Bucklew. The court recommended he serve his term at the Pensacola Federal Correctional Institution and that he participates in mental health counseling programs if available, according to federal officials. 

Thornton pled guilty to wire fraud Sept. 13. He had faced a maximum of 20 years in prison.

According to the plea agreement, Thornton had operated three companies over the years that, as of Jan. 2020, had no business operations or employees — Florida Health & Rehab Inc., Harpeth Holdings LLC and Florida Health Management Solutions.

In early April 2020, shortly after federal COVID-19 relief funds became available, Thornton applied for Economic Injury Disaster Loans from the SBA for Florida Health Management Solutions and Harpeth Holdings. In both cases, he wrote in the applications that both businesses were operational as of Jan. 31, 2020, had employees and were “suffering an economic injury due to a disaster,” officials contended in court documents. 

He then applied for money from the Paycheck Protection Program for both companies in May.

Then in June, he applied for EIDL in the name of Florida Health & Rehab, repeating the false statements that the company was operational and had employees, the plea agreement states. He then applied for the PPP loans in Florida Health’s name later in the month.

Thornton, according to the plea, had also applied for an additional $1.9 million in PPP money in the name of Florida Health but was unable to collect the money.

In all, the agreement says he was able to collect $814,632.50 in loans. He used the money to invest in "stocks, futures, and commodities,” officials say in a statement from the U.S. Attorney's Office in Tampa. 

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