Local man sentenced to prison for COVID relief fraud

A Boulder man was sentenced to prison for taking money from pandemic relief funds by filing false applications.

Russell Bryant Lester, 41, pleaded guilty in November to one count of wire fraud and was sentenced Tuesday to 30 months in federal prison by U.S. District Judge Daniel D. Domenico, according to a release from the Colorado District of the U.S. Attorney’s Office.

Lester was also ordered to pay restitution in the amount of $584,851.75.

“This defendant took funds intended as a lifeline for struggling businesses and used them for his personal piggy bank,” U.S. Attorney Cole Finegan said in a statement. “In the process, he concocted a whole set of lies and brought others into his crime. We thank our partners at the FBI and (Small Business Administration) for their continuing work to hold accountable criminals who try to cheat the system.”

According to the release, Lester made false statements to obtain loans from the Paycheck Protection Program and the Economic Injury Disaster Loan from March 2020 through August 2020.

Prosecutors said Lester received four EIDLS for a total of $217,400, received three grants through the EIDL program totaling $16,000, and received two PPP loans in an amount totaling $317,975.

A third PPP loan application for $297,200 was requested but not funded.

Lester also made false statements to the Colorado Department of Labor and Employment about not being employed in order to collect $17,578 in pandemic unemployment benefits from the state.

Prosecutors said Lester spent portions of the loan proceeds on non-eligible expenses, including paying old debts unrelated to the businesses receiving the

loans and extending highinterest loans to other individuals.

This case was investigated by the FBI Denver Division, with assistance from the Small Business Administration. The case was prosecuted by Assistant U.S. Attorneys Craig Fansler, Sarah Weiss and Rebecca Weber.

“The amount of pandemic program fraud we have seen is staggering,” said FBI Denver Special Agent in Charge Mark Michalek in a statement. “This was intended to be a financial safety net to help struggling families, support small businesses and keep the economy afloat — not a way for criminals to fund their lifestyles, like this one who stole hundreds of thousands of dollars. FBI Denver will continue to rigorously investigate those who defraud the taxpayer-funded pandemic relief program.”