Date: Feb. 22, 2024 Contact: newsroom@ci.irs.gov A Rochester man pleaded guilty today in federal court to fraud and identity theft related to his fraudulent applications for CARES Act loans and to possession of child sexual abuse material, U.S. Attorney Jane E. Young announces. Heath Gauthier pleaded guilty to wire fraud, attempted wire fraud, aggravated identity theft, and possession of child pornography. U.S. District Court Judge Laplante scheduled sentencing for May 30, 2024. Gauthier was charged with wire fraud and identity theft on Feb. 15, 2023, and was charged with possession of child pornography on Aug. 2, 2023. Between February 2020 and March 2021, Gauthier fraudulently applied for more than a dozen loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) programs. Gauthier applied for loans for non-existent companies and used the identities of more than ten deceased individuals in his applications, listing them in some applications as owners or employees of the fictitious companies. He also submitted false documents, including fabricated tax documents and counterfeit driver’s licenses, in support of the applications. In total the indictment alleges that Gauthier applied for more than $1 million in CARES Act loan funds. Gauthier was arrested on Feb. 16, 2023, and investigators executed a search warrant on his residence, where they seized and later searched Gauthier’s electronic devices. During the search, investigators discovered more than 1,500 files that contained child sexual abuse material. The charging statutes provide a sentence of no greater than 20 years in prison for wire fraud and aggravated identity theft and no greater than 10 years in prison for possession of child pornography. The identity theft charge carries a mandatory minimum sentence of two years and, if a defendant has a qualifying prior office, the child pornography charge carries a mandatory minimum sentence of 10 years. Gauthier also faces at least 5 years of supervised release, and restitution in the amount of at least $199,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case. The IRS Criminal Investigations and the Federal Bureau of Investigation led the investigation. Valuable assistance was provided by the Treasury Inspector General for Tax Administration and the Social Security Office of the Inspector General. Assistant U.S. Attorneys Matthew T. Hunter and Kasey Weiland are prosecuting the case. During the early part of the coronavirus pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act included multiple relief provisions to help the millions of Americans and many small businesses adversely affected by the pandemic, including the Paycheck Protection Program (PPP). Private lenders could participate in the PPP. The loans, which were supposed to be used for payroll, were fully guaranteed by the government. If borrowers used the PPP loans for payroll and other approved expenses as intended, they could apply for loan forgiveness. The CARES Act also opened up the Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) program. As with PPP loans, EIDL loans were supposed to be used for payroll and other business expenses such as rent and mortgage. On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form.
