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Business Observer Thursday, Jul. 28, 2022 1 week ago

Defense attorneys push back at PPP fraud allegations

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Lawyers say banks bear at least some responsibility for rampant PPP fraud — but doubt government will take action.
by: Brian Hartz Tampa Bay Editor

Ronald Kurpiers II, a Tampa attorney defending Alexander Leszczynski, a 22-year-old Redington Shores man accused of Paycheck Protection Program fraud, says he doesn’t know how his client will plead — a federal judge recently granted Kurpiers’ motion for a 90-day continuance — but if the case follows the precedent of hundreds of others Kurpiers has handled over his 35-year career, it will result in a guilty plea.

“The conviction rate by the feds is so high,” he says. “I wouldn’t be surprised if it was over 90%, so most (defendants plead guilty).”

Kurpiers was appointed by the court as Leszczynski’s attorney when his previous lawyer, a public defender, stepped down. Although he doesn’t have much to say about Leszczynski’s case, specifically — he still has tens of thousands of documents to review — he says it's no surprise PPP loans would be irresistible to scammers and fraudsters.

“I knew when it started this was a recipe for disaster,” Kurpiers says, likening it to the subprime mortgage crisis of the mid-2000s that contributed to the 2008 financial sector meltdown. He's of the opinion that today, just like then, banks and other lenders should share in the blame.

“Mortgage lenders were handing out mortgages left and right to people who couldn’t afford it,” he says. “Well, this is no different. All of a sudden, they put a program in place; they start handing out money. I don’t know if the banks got money back or got some kind of finder’s fee. What I do know is that there are a lot of things that you could be held responsible for in handing this money out, because, best I can tell, they didn’t do any background [checks]. They didn’t do anything to follow up on the applications. Nothing.”

Read more: Prosecutors and investigators in Florida take on COVID fraud

Attorney Ronald Kurpiers II. (Courtesy photo)

He adds, “If the applications are a bunch of garbage, then who’s responsible? The banks who processed them or the people who (submitted them)?”

Like Kurpiers, Nicole Hughes Waid, a white-collar criminal defense attorney in the Naples office of FisherBroyles, has also represented multiple defendants in PPP fraud cases. The list includes Fort Myers roofing executive Casey David Crowther, who was convicted after a federal trial in March 2021 and is currently in federal prison. 

Waid, who, over a two-decade career has both defended clients accused of bank fraud and prosecuted them,  chuckles when asked if she thinks the federal government will eventually go after banks for potential illegalities in PPP loan fraud cases. “I don’t see them going after banks,” Waid says, “because the way this was set up, they were only the facilitators.”

Kurpiers says he’s not shocked the government went after his client, calling Leszczynski “low-hanging fruit” for fraud investigators. “There’s a lot of them out there,” he says. “This may be the first of a wave of those type of cases.”

And, in a somewhat surprising revelation that speaks to the rampant abuse of PPP funds, Kurpiers says he was personally approached by people who wanted him to participate in fraud schemes. “I had many people come to me and say, ‘Hey, do you want to do this?’ And I’m like, ‘Nope.’”

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