Farmington Man Sentenced Pandemic Bank Fraud and More

Farmington, Mo. (KFMO) - A Farmington Man, 55-year-old Christopher Lee Carroll, is facing 108 months in prison after he was sentenced Tuesday for three counts of bank fraud, three counts of making false statements to a financial institution, one count of conspiracy to violate the Clean Air Act, 13 violations of the Clean Air Act and two counts of threatening a witness.

Carroll, who was convicted by a jury in August, is also ordered to pay restitution of $3 million. Evidence and testimony at trial showed Carroll, and his business partner, George Reed, were owners of a time share exit company called Square One Group LLC. In April of 2020, they submitted a false and fraudulent application for a $1.2 million Paycheck Protection Program (PPP) loan. The loan application falsely stated that the spouses of Reed and Carroll owned the company in order to conceal Carroll’s status as a paroled felon, which would have precluded his company from receiving PPP funds. Carroll also used his wife’s name to avoid any potential liability for the fraud.

The PPP loan was to help save businesses and jobs, but Carroll did not use the money to pay employees who were out of work or keep paying for health insurance for 17 of them. Instead, he used it to start a trucking company, Whiskey Dix Big Truck Repair LLC. Carroll and Reed then applied for loan forgiveness, falsely claiming that they’d spent the money on payroll and other permitted expenses. 

Reed and Carroll later sought a second loan of more than $1.6 million, taking a total of $660,000 in “owner draws” from the company after the loan was approved.

The Clean Air Act violations relate to emissions control equipment designed to reduce pollutants. Carroll had that equipment taken off Whiskey Dix’s fleet of diesel trucks. 

Reed, now 70, pled guilty to bank fraud in September of 2022 and admitted fraudulently applying for, obtaining and using the two PPP loans. Reed admitted as part of his guilty plea that the company failed to pay a “significant number” of employees, despite the PPP loans, and that Carroll terminated the health insurance benefits of at least 17 employees.

Reed was sentenced last month to time served and ordered to pay $3 million in restitution.