MORGANTOWN, W.Va. — Two Morgantown business owners are facing federal consequences in separate cases involving the misuse of COVID-era small-business relief funds, according to the U.S. Attorney’s Office for the Northern District of West Virginia.
The cases involving James Baldwin II and Kurt Ly are part of a larger nationwide enforcement effort targeting fraud connected to the Paycheck Protection Program and other pandemic relief programs.
Federal prosecutors said enforcement actions across the country involved more than 160 defendants and approximately $245 million in intended losses to taxpayers between June 12 and Sept. 1.
Baldwin, 46, owner of Morgantown-based Select Decks, was sentenced to 30 days in federal prison and ordered to pay $1,007,223 in restitution.
Investigators said Baldwin received $738,230 through multiple PPP loans. Some of the applications were connected to Select Decks, while others were submitted for three businesses that authorities said were not operating before the pandemic.
According to federal prosecutors, Baldwin provided false documentation to obtain the loans and later received forgiveness through the Small Business Administration.
Investigators also found that Baldwin failed to pay $258,993 in federal payroll taxes. Authorities said employees received pay stubs and W-2 forms showing taxes had been withheld, but the required money was not sent to the Internal Revenue Service.
Homeland Security Investigations and IRS Criminal Investigation handled the Baldwin investigation. Assistant U.S. Attorney Jennifer T. Conklin prosecuted the case.
A separate federal case involves Kurt Ly, 69, owner and operator of Vin Phat Inc. in Morgantown.
Ly admitted to participating in a scheme involving pandemic relief programs. Investigators said he received PPP funds, spent money on expenses that were not permitted under the program and later obtained loan forgiveness after falsely certifying that the money had been used for eligible business expenses.
Authorities said Ly also received a $146,600 Economic Injury Disaster Loan in August 2020 after certifying that the money would be used as working capital for Vin Phat.
Investigators determined that portions of the money instead went toward personal expenses. Those expenditures included a $15,000 vehicle payment, cryptocurrency investments and transfers to Ly’s personal bank account.
The Federal Reserve’s Office of Inspector General investigated the Ly case. Assistant U.S. Attorneys Jennifer T. Conklin and Eleanor F. Hurney are prosecuting the case.
The two Morgantown cases were included in a broader federal initiative involving 40 U.S. Attorney’s Offices and multiple federal and state investigative agencies. The enforcement effort is focused on recovering taxpayer money and pursuing cases involving alleged or admitted fraud in pandemic-era business assistance programs.
The Paycheck Protection Program was established during the COVID-19 pandemic to help qualifying businesses cover payroll and other approved operating expenses. Businesses seeking the loans and subsequent forgiveness were required to provide accurate information and certify that the money was used for authorized purposes.
River News will continue to follow developments in the cases.
