Former Texas FBI employee sentenced to home confinement for PPP fraud

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A former Texas FBI employee was sentenced in a federal court in San Antonio to three months of home confinement and five years of probation for one count of wire fraud related to fraudulent use of the Paycheck Protection Program (PPP).

The Investigation

According to court documents, Christopher James Phillips, 41, of Schertz, formed Phillips Global Realty LLC on Dec. 20, 2019 and submitted a PPP application on May 29, 2020, using his FBI-issued credentials to confirm his identity.

Shertz is a city northeast of San Antonio.

The backstory:

In his application, Phillips represented that he employed two individuals and had an average monthly payroll of $15,000. Additionally, he submitted an IRS Form 941 (Employer’s Quarterly Federal Tax Return) for the fourth quarter of 2019, claiming a payroll of $50,000 over the three-month period. 

IRS records indicate Phillips did not file such a form any time between 2019 and 2022, meaning the Form 941 he submitted as part of his PPP loan application was fraudulent, and the representations were false.

Phillips also certified that PPP funds would be spent only on authorized expenses, to include payroll, utilities, rent and mortgage interest. 

Timeline:

On June 2, 2020, he received $37,500 in PPP funds. 

Six days later, on June 8, Phillips wired $25,000 to a personal trading account and subsequently lost all of it due to trading activities. 

On June 9, 2020, he made a $5,117 payment towards his personal auto loan. 

On June 16, 2020, he paid approximately $8,500 towards his home mortgage.

Phillips was indicted Jan. 3, 2024 for one count of wire fraud and one count of engaging in monetary transaction over $10,000 using criminally derived proceeds. 

He was arrested Jan. 5, 2024 and released that day on a $30,000 bond. 

Phillips pleaded guilty to the wire fraud charge on Sept. 18, 2024. In addition to his home confinement and probation, Phillips was ordered to pay $39,771 in restitution.

What they're saying:

"The United States government will aggressively prosecute criminals, even if those individuals work within our own ranks," said U.S. Attorney Jaime Esparza for the Western District of Texas. "As a result of his actions, Phillips is now a convicted felon and will spend the next five years under the watchful eye of the United States Probation Department. This sentencing should send a message to all government personnel who would consider using their position for personal gain. This office will carry out its duty and seek to hold you accountable for betraying the invaluable trust of the American people."

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