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SALT LAKE CITY — A Lehi man will spend time in prison after he was convicted of lying on an application to get a loan through the Paycheck Protection Program.
Michael Leroi Douros, 66, was sentenced Wednesday to 28 months in federal prison, and he will be on supervised release for three years after his prison time. Douros pleaded guilty to five charges back in September 2020: two counts of bank fraud, two counts of making a false statement to a bank and one count of money laundering.
Douros admitted to making false statements to a bank to get a PPP loan for his business, Epic Rentals UT LLC, according to a plea agreement in the case. Douros was charged with making false claims to two banks and attempting to receive a total of $437,891 in loans.
Prosecutors say Douros misrepresented the total monthly payroll of his business, and he also failed to disclose that he had been convicted of a felony and had been on probation within the past five years. If a business is at least 20% owned by a convicted felon, it is not eligible for a PPP loan, according to a news release from the Utah U.S. Attorney's Office. Douros also allegedly claimed that his son owned 50% of Epic Rentals and he did not own a part of the company, though he later admitted that was false.
Court records say Douros lied to Zions Bank and was supposed to receive a $198,000 loan to Epic Rentals. However, the bank canceled the loan after giving the application another look.
Douros later submitted another PPP loan, this time through Cache Valley Bank. That loan was approved, and Epic Rentals received $239,091 in PPP funds. Douros later wrote a payroll check to himself for $20,000, according to court records.
"This prosecution highlights the serious penalties that can be imposed on anyone who attempts to defraud the federal government out of Paycheck Protection Program funding meant for honest and hardworking small businesses," said Utah U.S. Attorney Andrea T. Martinez in a statement.
PPP loans were made available to businesses as part of the CARES Act, which was enacted into law to provide financial assistance during the pandemic.
Federal court records show Douros was previously convicted of felony bank fraud in 2009 and spent time in federal prison. He was released in 2010, according to online records from the Federal Bureau of Prisons.
Douros also has multiple convictions in state court, most recently in 2017. Douros pleaded guilty in October 2017 to three felonies, which included securities fraud, communications fraud and issuing a bad check. He had a potential prison term suspended, but was sentenced to jail time instead.
