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BOISE — A South Jordan man was sentenced to prison Wednesday after he pleaded guilty to faking IRS documents for his Utah businesses to take out forgivable loans meant to provide emergency financial relief during the pandemic.
Daniel C. Labrum, 42, admitted to using his three businesses — Labrum Landscaping LLC, Pro Excavation LLC and Watson Construction LLC — as part of a "COVID-19 fraud ring," according to the FBI. Court documents say Labrum requested almost $1.4 million in loans between the three companies from February to April 2021.
The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, passed in March 2020, was meant to provide forgivable small business loans for those suffering economic hardship related to the pandemic. These Paycheck Protection Program loans required applicants to state, among other things, their business' average monthly payroll expenses and number of employees.
Despite Labrum not having "any legitimate business operations or employees in 2019 and 2020" between the three companies, the indictment says he made false monthly payroll documents, faked the number of employees and submitted fraudulent IRS forms to banks claiming to have over $3.4 million dollars in gross profit and over $2 million in wages during that same time period.
Labrum was sentenced to two years in prison for one count of bank fraud. The other charges against him — four counts of bank fraud and one count of engaging in a monetary transaction in property derived from specified unlawful activity — were dismissed as part of a plea agreement. He is ordered to pay $1,914,571 in restitution, with five years of probation after his release.
Labrum was sentenced alongside two "co-conspirators," according to the FBI. Khadijah X. Chapman, 59, of Atlanta, was sentenced to three years and 10 months in prison; and Eric J. O'Neil, 58, of Bethel, Connecticut, was sentenced to two years and three months in prison. Investigators said the three collectively obtained around $3.5 million in relief funding fraudulently.
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