Finalizing the legal proceedings, a federal judge decreed a prison sentence of 18 months for famous developer Eric Sheppard for swindling pandemic crisis loans worth a massive sum of dollars. These loans were part of a government scheme designed to help firms resistant to the COVID-19 predicament.
Besides being known for breathing new life into the Carillon Hotel located in Miami Beach, the 55-year-old developer got a much reduced punishment period compared to the penalty sought by the prosecutors, who accused Sheppard of dishonesty in his testimony at the January trial that ended with his conviction of wire fraud and serious identity theft cases.
Obstruction of justice and exploiting the Paycheck Protection Program of the government were considered for increasing Sheppard’s punishment according to the prosecutors. However, these reasons were dismissed by Judge Beth Bloom, who also declined the appeal made by defense attorneys for evasion of prison time. The probable sentence term would have been up to two and half years for him under federal sentencing norms for the offence committed.
Referencing other rampant loan fraud cases in South Florida where the fraudulent loan amount got spent on luxury items, Judge Bloom stated that Shepppard’s case was different but it was still a matter of funds received without being entitled to them.
[Link: Easy money from Uncle Sam made Miami a hub for PPP fraudsters](https://www.miamiherald.com/news/local/article286865650.html)
Sheppard, a local Miami resident, would remain free on bond until his restitution and forfeiture hearing set to happen on August 23, post which he must surrender to prison authorities.
The evidence shown at his sentencing hearing on Friday in Miami’s federal court confirmed Sheppard’s conviction for getting PPP loans worth approximately $450,000. The loan amounts were assured by the Small Business Administration after the country was gripped by the COVID-19 crisis in March 2020. He paid most of the loan money back, unlike most of the culprits who deceived the system.
Howard Srebnick, one of the defense attorneys, proposed the idea of a probationary sentence. He further argued that the loan money got used for employee payrolls and hiring construction laborers for a major retail store project at the developer’s shopping mall in Orlando.
Describing him as a regular component of the local society for several years, Srebnick opined that even if Sheppard got condemned for phony loan applications, the proceeds from them were used for the right purposes unlike cases where the criminals spent money on their lavish lifestyles.
Even though the developer’s university-going daughter and Amy Steele Donner, a former Miami-Dade Circuit Judge and his relative by marriage, pleaded for the judge’s mercy, the prosecutors perceived him as a greedy developer who manipulated the PPP loan scheme of the government for self-enrichment.
Assistant U.S. Attorney Ana Martinez stated that although the case doesn’t involve luxury cars, it is appalling for any professional businessman. Another prosecutor, Aimee Jimenez, accused Sheppard of lying during his trial and trying to influence the court during his sentencing session.
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Frequently Asked Questions
What is the Paycheck Protection Program?
The Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA forgives loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
What was the amount of the loan Eric Sheppard fraudulently obtained?
Eric Sheppard was convicted of fraudulently obtaining approximately $450,000 in PPP loans.
What were the charges against Eric Sheppard?
Eric Sheppard was charged with wire fraud and serious identity theft after lying in his testimonies during his trial. He was also accused of manipulating government’s Paycheck Protection Program and obstructing justice.
David Sheppard, the real estate developer and owner of Miami-based Commodore Realty, had his application for emergency pandemic loans of more than $5 million approved. However, the federal trial jury argued that the request was fraudulent. Sheppard is said to have put the loan money toward his personal costs, despite his attorneys insisting that it was acceptable to mix his funds.
Sheppard’s claims that his pandemic loan application included benefits for full-time W2 employees was disputed by the prosecutors. They noted that his business only hired independent contractors, which was unauthorized under the Small Business Administration’s Paycheck Protection Program.
Sheppard’s attorney, Jayne Weintraub, said the discrepancy between the two types of workers was minimal. She described Sheppard as an intelligent, self-made millionaire who was not particularly tech-savvy. Weintraub disputed the prosecutors’ assertion that Sheppard had forged other people’s signatures on a bank letter, a lease agreement, and three tax forms from the IRS.
Weintraub defended her client by pointing out that Sheppard applied for SBA’s financial aid at a critical point during the COVID-19 pandemic. She claimed that Sheppard used the loans to pay wages and buy supplies for rebuilding a large space that had been left empty when Toys ‘R Us went bankrupt. This space was to be used by another big retailer, Burlington Coat Factory, in a shopping center that Sheppard had developed in Orlando.
Since the passing of the CARES Act during the pandemic, South Florida, being the nation’s top fraud capital, has been leading in financial crime. Approximately 200 South Floridians have been accused of defrauding the PPP program by submitting applications for hundreds of millions of dollars that federal prosecutors consider counterfeit.
Among those convicted include a businessman who purchased a $318,000 Lamborghini with the PPP money, a nurse who allegedly lied about his business to get $474,000 that in part paid a Mercedes-Benz lease and child support, and a couple from North Miami who claimed to be farmers to qualify for $1 million in relief benefits.
Read more details about similar cases [here](https://www.miamiherald.com/news/local/article272928315.html#storylink=cpy).
## Frequently Asked Questions
### What was the dispute about David Sheppard’s pandemic loan application?
Sheppard’s loan application was approved, but federal prosecutors argued that it was fraudulent. They maintained that he used the loan for personal costs and that his claim of having full-time W2 employees was false – his business only hired independent contractors, which was not allowed under the Small Business Administration’s Paycheck Protection Program.
### What defense did Sheppard’s attorney give?
Jayne Weintraub, Sheppard’s attorney, claimed that the discrepancies between the two types of workers were minor. Also, she stated that Sheppard used the received loan to pay for wages and supplies necessary to rebuild a massive space in a shopping mall that he had developed.
### What has happened to others accused of defrauding the PPP program?
There have been multiple cases of individuals convicted of defrauding the PPP program. For instance, a businessman was convicted for using the PPP money to buy a Lamborghini. Yet another involved a nurse who lied about his business to obtain funds used partially to pay a Mercedes-Benz lease and child support. There was also a couple who falsely claimed to be farmers to qualify for $1 million in relief benefits.
