Couple Sentenced to a Combined 32 Years in Prison for PPP Fraud – Fraud Friday
October 18, 2024
Delaney Sexton
Contributing Editor
Couple Sentenced to a Combined 32 Years in Prison for PPP Fraud – Fraud Friday
“The Fullertons and their co-conspirators created a complex scheme to fraudulently obtain Paycheck Protection Program loans intended to help small businesses affected by the COVID-19 pandemic. They falsified payroll records, banking details, and other financial documents to obtain the funds. The stolen money became their playground, purchasing luxury watches, cars and other goods,” says Lucy Tan, acting Special Agent in Charge of IRS Criminal Investigation’s Houston Field Office.
Recently, Michael Fullerton and Tiffany Fullerton were handed down lengthy prison sentences after stealing $3 million from PPP with their two co-conspirators. Michael Fullerton pleaded guilty to 11 counts of fraud and identity theft which resulted in a sentence of 23 years and 10 months. Tiffany went to trial but was found guilty, and she left the courtroom with a prison sentence of 9 years. The couple also must pay over $3 million in restitution.
The couple along with a former business partner and a former employee carried out a scheme to fraudulently apply for 6 PPP loans. For their applications, they found businesses whose registration had expired or had been dormant for extended periods of time to use for the applications and applied for $3.5 million.
From the start, Michael Fullerton went to significant lengths to hide his criminal activity. According to the sentencing memorandum, Michael:
- Stole the identities of his employees to file the fraudulent PPP applications;
- Forged tax and business records;
- Stole the identity of an accountant to legitimize the applications;
- Recruited a previously uninvolved employee to use his identity for three of the fraudulent PPP applications;
- Stole his father-in-law’s identity to obtain an EIN; and
- Created a fake law firm and fake attorneys to hide his criminal activity.
Even after Michael knew federal agents were investigating him, he submitted three more PPP applications seeking more than half a million dollars.
After receiving the money, the couple attempted to start a business in Oklahoma which involved a marijuana grow and dispensary, a bar and grill, and an auto/boat repair shop. In addition, they purchased a semi-truck motorhome, two Rolex watches, and a 1983 Uniflite 36-foot double cabin boat named “Breakfast at Tiffany’s”.
What led to a two-decade-long sentence was Michael’s attempts to obstruct the prosecution and his lengthy criminal history. In October 2021, Michael claimed he was suffering from a mysterious, debilitating illness that left him with only months to live. He did so in order to delay court proceedings. Two years later, he faked a stroke to delay the trial. At the hospital, MRI and CT scans “failed to show any physical evidence of a stroke”. He continued to claim his condition prevented him from proceeding with the trial until the day before the trial date when Michael made a “miraculous recovery”.
During Tiffany’s trial, Michael lied under oath several times, and he accused the prosecuting attorney of dishonesty. During cross-examination, he refused to answer questions, which the court admonished him for multiple times.
Michael’s criminal history did him no favors for the sentencing either. His criminal career started in 1983 and consisted of:
- 12 theft or theft-related convictions;
- Fraud-related offenses like tampering with government records, identity theft, and forgery;
- A prior bank fraud conviction which he served 18 months for;
- He violated the terms of his supervised release and was sentenced to another 2 years after being released; and
- Multiple sentences to state prison.
He admitted in his testimony that he had committed bankruptcy fraud by hiding assets, and Michael also testified about his plan to commit insurance fraud.
For now, Michael’s fraud career will be put to a stop, and the Fullertons will be behind bars serving time.
Lucy Tan went on to say: “Financial investigations follow the money, and it always leaves a trail. If you’re committing the crime, it’s only a matter of time before you’re caught and sent to prison.”
Sources:
U.S. Attorney’s Office Press Release
Michael’s Charges
Sentencing Memorandum