Paycheck Protection Program form STOCK
CNN  — 

An Arizona businessman highlighted in a CNN investigation has been sentenced to four years in prison for fraudulently securing millions of dollars in federal Covid-19 relief funding – using a chunk of the proceeds to buy a Porsche and a new home, according to the Justice Department.

At his sentencing last week, James Theodore Polzin, 48, was also ordered to pay more than $2.2 million in restitution. He pleaded guilty to federal fraud and money laundering charges last year in connection with a scheme in which he filed a litany of phony loan applications claiming fake employees and revenues for business entities he owned and operated.

While the Small Business Administration’s Paycheck Protection Program (PPP) successfully helped many companies pay workers during the pandemic, it was plagued by questionable lending and rampant fraud. To date, the Justice Department says it has opened more than 95 criminal cases against more than 150 defendants and has seized more than $75 million in cash proceeds, as well as real estate and luxury goods.

Prior to charges being filed against Polzin, CNN reported that he had obtained at least six PPP loans worth roughly $1.2 million which were intended to help companies stay afloat during the pandemic.

CNN found that he received this money for businesses he classified as tax firms and related entities even though he wasn’t a certified public accountant and a court injunction had barred him from masquerading as one. A string of disgruntled clients also told CNN that he had taken their money and never submitted their taxes or that he filed them incorrectly.

In his plea agreement, Polzin admitted to submitting 23 fraudulent loan applications for more than $3.5 million in loans from the PPP program and the Economic Injury Disaster Loan (EIDL) program, another SBA initiative intended specifically for businesses that lost revenue due to Covid-19. All but six of the applications were approved and Polzin went on to use the government relief funds to buy a new home in Arizona and a flashy car, according to bank records cited in court filings. He also stashed some of the cash in offshore accounts.

Polzin, who is married to a Ukrainian citizen and had spent much of his time overseas, allegedly sold his Porsche for $120,000 the day before he was arrested last year, around two weeks after CNN’s investigation, while he was on his way to the airport with a one-way ticket to Ukraine.

Polzin previously did not respond to CNN’s requests for comment. His attorney did not respond to a request for comment about his sentencing.

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