News Summary
Michael James DeFrees, a 63-year-old from Vancouver, was sentenced to 21 months in federal prison for fraudulently acquiring over $2.5 million in COVID-19 relief funds. He falsely claimed eligibility while on probation for a felony conviction. Along with the sentence, DeFrees must forfeit $1.2 million and pay over $1.3 million in restitution to the SBA. Federal investigators actively recovered stolen funds, involving asset seizures including vehicles and boats, to satisfy obligations and maintain the integrity of assistance programs.
Vancouver, Washington — Major Fraud Cases Unfold in COVID-19 Relief Program
Michael DeFrees, a 63-year-old real estate developer from Vancouver, Washington, has been sentenced to 21 months in federal prison after being found guilty of fraudulently securing over $2.5 million in COVID-19 relief funds. The funds were obtained through the Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) during the pandemic period from 2020 to 2022. This case highlights ongoing efforts by authorities to combat financial crimes related to pandemic relief efforts.
Details of the Fraud and Legal Outcomes
DeFrees had applied for COVID-19 relief programs by providing false information, claiming he had no disqualifying criminal convictions or probation status. In reality, at the time of application, he was serving probation stemming from a 2017 felony conviction involving falsified records in a bankruptcy case. Despite this, he successfully obtained loans that he used mostly for personal expenses. He also engaged in money laundering activities by channeling a portion of the funds through unlisted business entities.
As part of the sentencing, DeFrees was ordered to forfeit $1.2 million and to pay restitution amounting to $1,346,481 to the U.S. Small Business Administration (SBA). The U.S. Attorney’s Office’s Asset Recovery Unit took several measures to recover these funds, including filing liens against DeFrees’s properties and seizing various assets. These assets include a boat from 2016, a 2006 Ford F-350 truck, a racing boat from 2006, Honda Yeti snow bikes, and a 2011 Land Rover. The recovered assets, along with proceeds from their sale and one piece of real estate, helped fully satisfy the restitution and forfeiture obligations.
Recovery of Funds and Statements from Authorities
Officials involved in the case emphasized the dedicated efforts of investigators to retrieve money for taxpayers and the community. The recovered funds will be returned to the SBA, while the forfeiture proceeds will be deposited into the Assets Forfeiture Fund, supporting future law enforcement actions against financial crimes.
Other Significant COVID-19 Relief Fraud Cases
In a related development, authorities revealed the guilty pleas of two Arizona brothers, Eric and Anthony Karnezis, who conspired to defraud the SBA of nearly $109 million during the COVID-19 relief program. Eric Karnezis submitted at least 350 fraudulent PPP applications, earning approximately $3 million from these activities. His brother Anthony submitted at least 140 applications, receiving over $957,000. Both brothers faced serious felony charges and are scheduled for sentencing on June 20, 2025, where they will also be required to pay restitution in the millions.
Additional Incidents of Fraud and Charges
Another individual, Joel Matthew Caswell, aged 30, was recently arrested for committing multiple financial crimes involving PPP and EIDL programs. Caswell applied for funds from 2018 to 2022, falsely reporting employee numbers and business revenues. Authorities have charged him with wire fraud, tax evasion, and falsifying documents, with alleged funds received exceeding $224,000. Conditions of his release include restrictions on assets and surrendering his passport.
Caswell’s background includes a history of legal and financial disputes, with multiple lawsuits totaling over $630,000 related to breach of contract and unpaid debts. His case underscores concerns over the integrity of pandemic-related support schemes and the ongoing investigations targeting abuse of such programs.
Conclusion
The series of legal actions involving alleged COVID-19 relief fraudsters demonstrates continued efforts by federal authorities to uphold the integrity of emergency aid programs. The DeFrees case reflects broader national efforts to identify and penalize those who exploited federal relief funds through deception and money laundering, while the Karnezis brothers and Joel Caswell cases serve as cautionary examples for individuals engaging in fraudulent activities related to government aid initiatives.
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Additional Resources
- KPTV: $25M Recovered from Vancouver Real Estate Developer COVID-19 Loan Fraud
- Oregon Live: Man Pleads Guilty in Oregon to $60 Million COVID Relief Fraud
- KTVZ: Arizona Brothers Plead Guilty in Oregon to $109 Million COVID Relief Fraud
- Wikipedia: COVID-19 Relief Funding in the United States
- Boston 25 News: Maine Woman Fakes Beauty Salon for Pandemic Relief Funds
Author: STAFF HERE INDIANAPOLIS WRITER
INDIANAPOLIS STAFF WRITER The INDIANAPOLIS STAFF WRITER represents the experienced team at HEREIndianapolis.com, your go-to source for actionable local news and information in Indianapolis, Marion County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Indianapolis 500, Indy Jazz Fest, and the Indiana State Fair. Our coverage extends to key organizations like the Indy Chamber and Visit Indy, plus leading businesses in motorsports and healthcare that power the local economy such as Indianapolis Motor Speedway and IU Health. As part of the broader HERE network, we provide comprehensive, credible insights into Indiana's dynamic landscape.
