EAST ST. LOUIS - Dana Howard of Caseyville and Richard Myers of Edwardsville committed fraud when they certified that their construction company needed $1,393,500 to pay employees in the lockdown, according to grand jurors in U.S. district court.
On Nov. 20 they indicted Howard and Myers on charges of conspiracy, wire fraud, bankruptcy fraud, failing to pay taxes, and making false statements to the small business administration.
They found Myers spent $250,000 on a house.
They also indicted Glenn Sunnquist, bookkeeper for Howard and Myers, on charges of conspiracy and wire fraud.
At the beginning of the lockdown Congress authorized the small business administration to guarantee loans for payroll protection.
Lenders could forgive loans after 24 weeks if employers spent more than 60% on payroll.
Employers could also spend on mortgages, rent, utilities and accounts payable.
They could not spend on automobiles, homes, clothes and jewelry.
Howard and Myers applied to St. Louis Bank in Missouri in April 2020 on behalf of their Zoie construction company in East St. Louis.
Research would have detected that Bank of Springfield sought almost $800,000 from Zoie in a pending foreclosure action at Madison County circuit court.
Research would have detected that in February 2020, a Chicago judge entered judgment of $28,642 against Zoie for failure to contribute to health and welfare funds of electrical workers.
Lockdown policy, however, favored speedy disbursement over sensible disbursement.
St. Louis Bank opened an account for Zoie on April 17, 2020 and deposited $1,393,500 into it for payroll plus $33,000 for other purposes.
Four days later, according to grand jurors, Howard and Myers moved $426,000 from Zoie’s account to an account of their Zade trucking company.
Grand jurors found they paid down Zade’s debts.
Grand jurors found they split the remaining million by writing checks to themselves for $500,000 with “payroll funds” on the memo lines.
Grand jurors found they each obtained four cashier’s checks for $100,000 and two for $50,000.
Grand jurors found Myers placed $250,000 in his daughter’s checking account at Busey Bank in Champaign in May 2020.
They found he wired $250,000 from Busey Bank to Madison County Title for a home in Worden in the name of a woman he would later marry.
On May 18, 2020 the health and welfare trust of Central Illinois carpenters filed suit in Southern Illinois district claiming Zoie failed to make contributions.
Ten days later, according to grand jurors, Howard and Myers each transferred a $50,000 cashier’s check to a Zade account at Busey Bank.
Then they each withdrew $9,930 from the Zade account.
On June 3, 2020, Myers filed a petition in bankruptcy court in East St. Louis.
Grand jurors found he listed $1,000 in cash although he held $200,000 in cashier’s checks.
They found he filed a schedule of property showing he owned no real estate and he swore at a hearing on July 1, 2020 that his property schedule was accurate.
On July 2, a Madison County judge awarded default judgment to Bank of Springfield for $729,826.09.
Grand jurors found that on July 3 Myers deposited a $100,000 cashier’s check in the Zade account and Howard deposited a $50,000 cashier’s check in the Zade account.
On July 21, 2020 Senior U.S. District Judge Phil Gilbert granted default judgment of $122,867.20 to Central Illinois carpenters.
Myers dismissed his bankruptcy petition in September stating he settled with his main lender.
In December, Howard filed a bankruptcy petition.
Grand jurors found his property schedule didn’t include his cashier’s checks.
Both Howard and Myers listed in their bankruptcy petitions a liability around $430,000 from a lawsuit with BFG Corporation of Chicago but they didn’t identify the court where it happened.
Grand jurors found Howard and Myers applied for a second loan of $1,426,525 in January 2021 and they answered "no" to a question about bankruptcy.
They found Howard and Myers applied for forgiveness of the first loan and certified that they spent $860,346.66 on payroll and $555,741.64 on rent and lease.
They found that in February 2021, Myers traded a $100,000 cashier’s check for an equal cashier’s check payable to AAA Rentals for deposit in Busey Bank.
They found Myers’s wife owned AAA Rentals.
They found a loan officer at St. Louis Bank asked Zoie for spending records and bookkeeper Sunnquist falsified a spreadsheet in September 2021.
They found he claimed Zoie rented equipment from a company no longer doing business because the owner went to prison.
They found Howard revised the application for the second loan and Sunnquist sent the bank a message that included false statements and a forgery.
They found the small business administration denied forgiveness of the first loan in August 2022.
They found Howard wired $47,000 to a law firm in September and October.
Howard’s bankruptcy case remains open.
He played linebacker for the University of Illinois and in 1994 he received the Dick Butkus Award as the best college linebacker in the nation.
He played for the St. Louis Rams in 1995 and the Chicago Bears in 1996.
n June, the trustee sold his Butkus award for $18,000.
Assistant U.S. attorney Kevin Burke and federal agent Christopher Johnson of Springfield led the investigation for U.S. attorney Rachelle Crowe.
Johnson stated in a press release from Crowe that federal agents opened thousands of investigations into virus fraud.
“Fraud was massive in scale and ultimately the cost will be paid by American taxpayers for generations to come,” he said.
District Judge David Dugan presides.