Bentonville man pleads guilty in fraud case, admits taking millions meant for covid relief

Bentonville man part of conspiracy that took $16.5 million from federal program


SPOKANE, Wash. -- A Bentonville man pleaded guilty Tuesday to defrauding taxpayers of $16.5 million from the Paycheck Protection Program and other government relief meant to help struggling businesses survive the covid-19 pandemic, court records show.

Tyler Keith Penix, 37, pleaded guilty to one count of conspiracy to commit wire fraud, punishable by up to 20 years in prison, in federal court in Spokane, Wash., from where other suspects in the conspiracy operated, according to an announcement from Vanessa R. Waldref, U.S. attorney for the Eastern District of Washington. Sentencing is set for 10 a.m. Jan. 11 in Spokane.

Penix did business under the name of Tyler Keith Andrews during the fraud, according to court records.

Federal covid relief programs for business "quickly ran out of money due to the number of businesses that requested funding, meaning that struggling, deserving small businesses were not able to obtain critically needed funding to keep their businesses afloat during the shutdowns and disruptions caused by the covid pandemic," Waldref's announcement says.

Penix submitted dozens of fraudulent applications for covid relief money for "purported businesses supposedly owned by himself and others," the announcement says and court records show.

One Spokane businessman received more than $300,000 in covid relief going to two businesses that were inactive at the time, court records show. Penix received a share of the money and referrals to more than a dozen more potential clients. Those clients obtained more money through false claims and paid Penix a fee, usually about $15,000 each, court records show. Penix's co-conspirators took in a total of $13.5 million, according to court records.

Penix also admitted to preparing and submitting false applications on behalf of businesses owned by him, directly getting another $3.25 million, court records show.

"I'm so grateful for the support and collaboration with the U.S. Attorney's Office for the Western District of Arkansas and the State Department's Diplomatic Security Service," Waldref says in her announcement. The main work was done by a task force set up in Washington state to track down covid-related fraud with the assistance of other federal agencies, her statement says. An indictment against Penix's co-conspirators is pending, she said.

The FBI arrested Penix on Feb. 9 in Tulsa on the indictment, court records show. According to Penix's guilty plea, the conspiracy began on or about June 25, 2020, and continued at least through May 3, 2022.

Penix did business as the owner of Andrews Associates Inc., doing business in both Arkansas and Colorado, according to his guilty plea and indictment. Andrews Associates claimed to offer consulting services and some financial services for business clients.


On the web

Announcement from the U.S. Attorney in Washington state: https://bit.ly/3ZAK5vj

 



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