U.S. attorney seeks prison time for former Kansas lawmaker convicted of COVID fraud

May 10—Former Kansas Rep. Michael Capps is seeking to avoid prison time after he was convicted of 12 felonies for defrauding federal pandemic relief programs of nearly $500,000 when he was a member of the Kansas House of Representatives.

His sentencing hearing is scheduled for Thursday afternoon at the U.S. Courthouse in downtown Wichita. A jury found him guilty of bank fraud, false statements, wire fraud and money laundering in December.

The U.S. Attorney's Office will argue, according to public court filings, that Capps should serve more than four years in federal prison with supervised release starting after 51 months because of the severity of his crimes, continued deception and lack of contrition. It's unclear how much restitution the government is seeking.

"Without question, his conduct substantially eroded the public's trust in its elected officials," U.S. Attorney for the District of Kansas Kate E. Brubacher's sentencing memorandum says. "Much like a policeman who engages in malfeasance or a doctor who deals in drugs, he should bear greater responsibility for his conduct."

Capps, 45, will argue for no prison time and five years of supervised release, when he would report to a probation officer, court filings show.

An FBI agent testified that it began an investigation into Capps after a Wichita Eagle investigation in December 2020 found Capps used fake payroll numbers, fake employment data and fake revenues on multiple loan applications to tap into emergency funding provided through the CARES Act during the height of the coronavirus pandemic. Capps was awarded hundreds of thousands of dollars through the Small Business Association's Paycheck Protection Program and Economic Injury Disaster Loan Program along with two grants through the Kansas Department of Commerce.

Federal investigators found that Capps put some of the COVID cash — which he obtained using two businesses and a now-defunct nonprofit under his control — in a high-risk investment account that was later seized by federal authorities.

His justification for a lighter sentence includes a concern that — given his mental and physical health — he would be more likely to contract COVID-19 and die from it if he were in prison.

"Mike (Capps) has Hypertension Stage I, Combat PTSD, complex sleep apnea, chronic migraines and is prediabetic," Kurt Kerns, his defense lawyer, said in a recent filing. "He is, therefore, at an increased risk of death or severe illness in the event he contracts an illness."

Capps was a member of a Statehouse coalition of Republican lawmakers who voted during a special session in June 2020 to severely limit the power of county health officers, the Kansas Department of Health and Environment and Democratic Gov. Laura Kelly to respond to the pandemic.

Kerns contends that Capps deserves leniency because he is a disabled veteran who served in the Air Force in the early 2000s. Kerns said Capps was diagnosed with post-traumatic stress disorder in 2018.

That year, Capps was appointed to represent the 85th House District, which includes parts of north Wichita and northern suburbs Bel Aire, Kechi and Benton. He was elected later that year and served through the end of 2020.

A filing entered by Kerns claims Capps' PTSD was 70 percent disabling, a rating assigned by the Department of Veteran Affairs to determine how much disability compensation vets are eligible to receive.

The disability filing says the 70% determination was based on his service treatment records, personal records, treatment from VAMC-Kansas City and an examination by QTC medical services in November 2019.

Combined, they found Capps had "difficulty in adapting to stressful circumstances, difficulty in adapting to work, inability to establish and maintain effective relationships, depressed mood, disturbances of motivation and mood, difficulty in adapting to a worklike setting, anxiety, occupational and social impairment with occasional decrease in work efficiency and intermittent periods of inability to perform occupational tasks (although generally functioning satisfactorily, with routine behavior, self-care, and conversation normal), difficulty in establishing and maintaining effective work and social relationships and chronic sleep impairment."

U.S. Attorney Brubacher said in her filing that "these health concerns are not 'present to an unusual degree' that would distinguish this case from other cases" covered under sentencing guidelines.

"He was caught in lie after lie, and continued to deflect and blame others," the U.S. attorney's filing says. "The defendant (Capps) has failed to take responsibility for his actions, and lied brazenly while an elected official to obtain government funds for his own personal use."

Brubacher said Capps' actions signal that he could continue to skirt the rules for personal gain if allowed to stay out of prison.

"His conduct also included efforts to conceal what he did. Defendant (Capps) has failed to demonstrate any remorse or contrition, and instead persists in casting himself as someone who simply made mistake after mistake after mistake. The defendant's acts were intentional, goal-oriented, and duplicitous, and his persistence in offering up ill-conceived and illegitimate claims signals he will continue to try to gain personal advantage despite clearly defined rules."

Federal and state agencies lowered their guard on verifying information submitted by applicants, allowing Capps and others to self-certify that the information they provided was accurate. To maximize his COVID awards, Capps overstated his business revenues and the number of employees at his businesses.

During the trial, Capps admitted that he counted his business partner and former City Council member James Clenenin's two young daughters, ages 10 and 14, as employees at Midwest Business Group LLC. He could not account for several other employees he claimed to have at Krivacy LLC and the nonprofit Fourth and Long Foundation.

Support letters

Several friends, family members and other associates submitted letters to U.S. Judge Eric Melgren seeking leniency for Capps.

They portrayed Capps as a family-first public servant, mentor and giving businessman who helped guide several young men — including his adopted son, Chaz Capps — through tough times.

Bud Cortner, a Realtor with Keller Williams Signature Partners and past president of the local Realtor association, wrote in support of a lighter sentence.

"I am having a hard time understanding what little I know about the case Michael is involved in," Cortner wrote in his letter to Melgren. "The charges he was convicted of just do not sound like something he would do and I do not believe this defines him at all. Anyway, I know you are the one that is doing the sentencing and I am asking you for leniency in this case. Michael is a great individual and a negative sentence would not benefit anyone, especially his son and those that care for Michael. I believe he is a positive influence on those around him and that could possibly be destroyed with a severe sentence that does not serve the public interest."

Clendenin, who testified as a government witness and for the defense at trial, said in his letter that Capps' convictions are "not at all who Michael is as a person."

"I have seen tremendous sacrifices made by Michael in his effort to serve the community, too many to mention in this letter," Clendenin wrote. "I've seen him turn the lives of many kids around as a mentor and father figure, serving with the children's advocacy group CASA. In fact Michael's passion for people and abused kids is what brought us together as friends in the political arena. Michael had made the world he lives in a better place, and I truly believe it would continue to be better with his freedom."

"I am asking you for leniency in the case against Michael," Clendenin wrote. "I have heard and read so many things that are not true about him and felt I should at least project the positive light I see him in."

Controversial figure

The federal case was one of several controversies involving Capps during his time in the public eye.

Before he ran for office in 2018, a residency challenge accused him of listing a foreclosed house as his residence so he could qualify for public office. The State Objections Board dismissed the charge and allowed Capps to stay on the ballot. The objections board included several high-profile Republicans: then-Secretary of State Kris Kobach, who is now attorney general; then-Attorney General Derek Schmidt, who gave up his position to run an unsuccessful campaign for governor; and then-Lt. Gov. Tracey Mann, who was later elected to the U.S. House of Representatives representing the 1st District.

A month later, Sedgwick County Republican precinct committee members appointed Capps to fill Chuck Weber's vacant seat, after Weber took a job as a lobbyist for the Kansas Catholic Conference, allowing Capps to run as an incumbent despite not serving while the Legislature was in session. He edged out Democratic challenger Monica Marks by a slim margin.

Capps was disavowed twice by his party in less than 18 months. During the 2018 race, the state GOP cut ties with Capps after the Kansas Department for Children and Families found that he emotionally abused boys as a court-appointed CASA volunteer. The investigation's findings were reversed on a technicality, and Capps rejected the investigation's conclusions as "categorically false and untrue."

A year later, the Sedgwick County Republican Party declared him "persona non grata" and asked him to resign after an Eagle investigation uncovered his involvement in a smear campaign video that falsely accused then-mayoral candidate Brandon Whipple of sexual harassment. Capps responded by falsely and publicly accusing county GOP Chairman Dalton Glasscock of green-lighting the bogus video.

Capps worked up the plan to frame Glasscock with Michael O'Donnell, who at the time was a Sedgwick County commissioner, and Clendenin, his friend, business partner and a city council member. Their plan was secretly recorded and released a year later by Capps' former campaign manager Matthew Colborn after Capps lost his primary to Patrick Penn.

Whipple, who was elected mayor, filed a civil conspiracy to commit defamation lawsuit against Capps, Clendenin and O'Donnell in 2020. Capps is representing himself in the case, which is expected to go to trial later this year.

O'Donnell and Clendenin resigned after Sedgwick County District Attorney Marc Bennett announced he would move to oust the two officials for their role in the smear campaign and cover-up. Schmidt, the attorney general at the time, declined to pursue charges against Capps, saying only the Kansas House could expel him from office. The House was not in session at the time and Capps had already lost to Penn.. He ignored multiple calls by Republican officials to resign.

This story was originally published May 10, 2023, 1:13 PM.

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