David Epstein, a businessman from Owings Mills, Maryland, has been sentenced to one year and one day in federal prison followed by 12 months of home incarceration. This sentence comes after his guilty plea to wire fraud for submitting fraudulent loan applications under the CARES Act.
The announcement was made by U.S. Attorney Kelly O. Hayes for the District of Maryland, alongside Special Agent in Charge Kareem A. Carter from the IRS-CI Washington, D.C. Field Office.
The CARES Act, enacted in March 2020, aimed to provide financial assistance to Americans affected by the COVID-19 pandemic. It included programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL), which offered forgivable loans to small businesses.
According to court documents and Epstein's plea agreement, he engaged in a scheme between May 2020 and February 2021 to defraud financial institutions such as Cross River Bank, Bluevine, Celtic Bank, and the SBA. Epstein sought over $1.3 million in funds through false PPP loan applications for his company PEI Staffing.
On April 30, 2020, Epstein submitted a misleading PPP application claiming PEI employed 382 workers when only 79 were listed on an IRS form for that period. The application also contained inaccuracies about wages and fund usage. Furthermore, Epstein falsely claimed no common management with other businesses despite managing both PEI and Stafquik.
In February 2020, he submitted a fictitious SunTrust Bank statement linked to Stafquik instead of PEI. On May 4, 2020, over $1.3 million in PPP funds were disbursed into this account. Epstein then transferred these funds into personal accounts at two banks for unauthorized expenses including luxury car payments and home renovations.
Epstein attempted to disguise individuals he owed money as employees on PEI’s payroll and concealed the loan amount from family members and business partners.
The case is part of efforts by the District of Maryland Strike Force—one of five established nationwide by the Department of Justice—to tackle COVID-19 related frauds under the CARES Act.
U.S. Attorney Hayes praised the IRS-CI's investigative work and acknowledged Assistant U.S. Attorney Paul A. Riley along with Paralegal Specialist Joanna B.N. Huber for their contributions.
For further details on pandemic-related responses or reporting fraud allegations involving COVID-19 relief funds visit [Department of Justice website](https://www.justice.gov/coronavirus).