Another person has been sentenced to prison for taking advantage of funds meant to help businesses and nonprofit organizations after the pandemic. Theodore Johnson, 62, of Portland, has been sentenced to 15 months in federal prison and three years supervised release for making false claims where Northeast Bank issued a PPP loan worth more than $143,000 to Ten Penny. He was ordered to pay $321,000 to two banks, the U.S. Small Business Administration, and the Oregon Department of Administrative Services.
The funds were taken from financial aid meant to assist small businesses during the COVID-19 pandemic. According to court documents, in February 2017, Ted incorporated and began serving as the head of Ten Penny International Housing Foundation, an Oregon-based non-profit organization. The organization stated that it provided “hygiene products for the homeless, tiny home communities, transitional micro-housing, Natural Pathic Mental Health Counseling,” and more.
Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. It provided emergency financial assistance to American employers. The Attorney’s Office says Johnson took advantage of these funds after he “…saw an opportunity to fraudulently obtain government funds on Ten Penny’s behalf.”
Three Paycheck Protection Program (PPP) applications was started in March 2021. The first application falsely claimed that Ten Penny employed 16 people and had an average monthly payroll of more than $57,000. The proof sent turned out to be fraudulent tax documents and an electronic counterfeit IRS stamp to make it seem as though his forms had been received by the IRS.
Two more fraudulent PPP loan applications were submitted in May 2021. They again falsely claimed Ten Penny employed 16 people and had an average monthly payroll of at least $50,000. Johnson further claimed to have used the entirety of his first PPP loan for eligible expenses. As a result, Central Willamette Credit Union issued Johnson a second PPP loan worth more than $130,000.
