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O'Fallon, Illinois, man admits to PPP loan fraud after getting $487,000 loan

After lying on the application and failing to notify the bankruptcy judge, the loan was approved in April, and the business was awarded a $487,095 loan
Credit: SLBJ

O'FALLON, Ill. — The owner of an O'Fallon, Illinois, plumbing company admitted to lying on his Paycheck Protection Program application to illegally obtain nearly $500,000 in federal loans.

Jason Spengler, 45, pleaded guilty in federal court Wednesday to one count of making a false statement on a federal loan application.

According to court documents, Spengler applied for a PPP loan for his business, Spengler Plumbing, in 2020. When filling out his application, he said he was not involved in any bankruptcy even though his business was in bankruptcy.

As a business in bankruptcy, Spengler Plumbing was also required by law to obtain prior authorization from bankruptcy court before incurring any new unsecured debt, but Spengler did not.

After lying on the application and failing to notify the bankruptcy judge, the loan was approved in April, and the business was awarded a $487,095 loan.

“Together with U.S. Attorney Steve Weinhoeft and our law enforcement partners, we will continue to pursue fraud and abuse in bankruptcy cases,” stated Nancy J. Gargula, U.S. Trustee for Region 10.

Spengler could face a maximum of five years in prison and a fine of up to $250,000. Sentencing is set for Aug. 18. 

The case was investigated by the Small Business Administration – Office of the Inspector General.

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