A Springfield business owner has been charged with PPP fraud

Springfield, Mo. (KY3) – The federal government is suing a southwest Missouri business owner for using PPP funds during the outbreak.

Federal officials accused John Michael Fels of using money from businesses to pay for private home improvements during the outbreak. Felts is a well-known business owner of popular restaurants such as Hot Cluckers, Taco Habitat, Bourbon and Beale.

Federal investigators say Felts used fake IDs to apply for at least a dozen payday protection loans, using hundreds of thousands of dollars in assets instead of businesses. Investigators said he participated in a “scheme designed to complete false and fraudulent applications for the Paycheck Protection Program.”

A spokeswoman for the U.S. attorney for the Western District of Missouri said no criminal charges have been filed against Felts. However, the federal government wants to foreclose on various properties in the Jones Spring subdivision in East Springfield. Felts used hundreds of thousands in federal funds for housing improvements.

David Mitchell, professor of economics at Missouri State University Loans are sent with good intentions.

“It’s expected to be used for your regular business expenses, your payroll, your utility bills, you’ll probably continue to pay rent on the building,” Mitchell said.

Mitchell says most of the schemes we’re seeing now are likely to happen because the government wants to help businesses quickly.

“The government was trying to get money out the door as quickly as possible, and when that happens, that really opens yourself up to fraud,” Mitchell said.

The U.S. Small Business Administration and other financial institutions said Felt requested the loans using various companies he controlled, investigators said.

“Many of these companies had no employees and were not in operation at the time,” the documents say, though Felts says they were.

Mitchell without immediate government action. Many businesses could have failed.

“It might take two, three, four, maybe six months to get that amount of money. Of course, the businesses were operating in an orderly manner,” Mitchell said.

Mitchell explains that as a customer, we all pay for this.

“Fraud is everybody’s problem, and it’s something we all pay for in the end,” Mitchell said. As taxpayers, we are all basically paying for it. Those are our tax dollars basically going to someone else.

Attorneys for Felts released this statement.

“On September 13, 2022, members of the Internal Revenue Service executed search warrants for information regarding Michael Felts’ business dealings with an individual from San Antonio, Texas. Mr. Felts said he had retained legal counsel to pursue this matter and could not comment further on this investigation.

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