Plainview man admits to $4 million PPP loan fraud scheme

A 58-year-old man faces up to 102 years in prison after pleading guilty to a five federal felony counts stemming from a $4 million Paycheck Protection Program Loan fraud scheme out of Plainview.

Andrew Travis Johnson, 58, appeared with his attorney William McMurrey before U.S. Magistrate Judge D. Gordon Bryant for initial appearance and arraignment hearings.

Johnson pleaded guilty to three counts of bank fraud, one count of aggravated identity theft and one count of engaging in monetary transactions in property derived from specified unlawful activity.

His charges were filed in the form of an information, and Johnson waived his right for a grand jury indictment.

Each of the first three counts carries a punishment up to 30 years in prison.

Johnson's case is the first PPP Loan Fraud investigation arising from the region, according to officials with the US attorney's office.

From April 2020 to April 2021 Johnson fraudulently obtained 27 loans totaling more than $3.8 million from the paycheck protection program. Johnson also obtained forgiveness for the loans, meaning he didn't have to repay them.

The program provided government-backed, low-interest, loans to business owners to allow them to keep their employees during the economic slump caused by the COVID-19 pandemic. The program also allowed the loans to be forgiven.

Johnson admitted to obtaining about $3.3 million worth of PPP loans for three Plainview entities. Two of those entities were Radar Foundation, a non-profit entity that organized fundraisers for people with intellectual limitations, and Radar Supports, an organization that provided speech and occupational therapy services.

Radar Supports employed about 10 people while the foundation had a handful of employees hired on an ad hoc basis. However, Johnson inflated the entities' employee roster and payroll when he applied for the PPP loans. Some of the employees listed either didn't exist or were clients of the entities. He also provided false IRS forms and employee lists as part of the application.

Meanwhile, the third entity, Radar Supports Construction, was a bogus business created for the purposes of obtaining the PPP loans.

Johnson also obtained more than $436,000 worth of PPP loans for 11 independent contractors. At least four of the loans' recipients were unaware that Johnson applied for the loans under their names. Two of whom were relatives and two were colleagues. None of them knew of the loans.

Johnson also used those people's names and information without their permission to open bank accounts where the PPP loans were deposited.

Johnson used the money he fraudulently obtained to buy multiple vehicles, and a home in south Lubbock. He also spent the money on home renovations, vacations, clothing, cosmetic surgery, college tuition wedding expenses and heavy equipment to help family members start new businesses.

The court documents did not indicate how the investigation into Johnson's scheme began. The documents also indicate other people may have been part of the scheme, however, it appears that Johnson is the only person charged in this case.

Prosecutors did not move to detain Johnson as he awaits sentencing. Bryant released Johnson, who is living in Odessa, on a personal recognizance bond and will be subjected to electronic monitoring.

Bryant told Johnson that based on his answers at his arraignment hearing, he would be recommending the district judge to accept his guilty plea and enter his conviction. While on bond, Johnson will need permission to work or volunteer in roles of fiduciary capacity.

Defendants are typically provided a 14-day window after pleading guilty, to make an objection or withdraw their pleas. However, Johnson waived his objection period, meaning a district judge can enter his conviction as soon as he receives Bryant's recommendation and report.