A 33-year-old St. Paul man has pleaded guilty to fraudulently obtaining $841,000 in loans from the federal Paycheck Protection Program created to help small businesses affected by COVID-19.
Kyle W. Brenizer admitted Monday in U.S. District Court in St. Paul to charges of wire fraud, money laundering and aggravated impersonation in connection with loans to his defunct construction company.
The sentence has not yet been set. In the meantime, Brenizer remains in federal custody without bail in Sherburne County Jail.
Defense attorney Kevin DeVore said Tuesday that “after reviewing the evidence…the decision was made that the government had sufficient evidence to prove its case. Accordingly, it was best to focus our energy on sentencing issues such as loss”. [amount] calculation rather than on the question of guilt or innocence.”
DeVore said the plea deal provides a wide range of sentencing options “due to the calculation of loss, which will be a point of contention at the sentencing hearing.”
According to the charges, Brenizer’s Brooklyn Park-based True-Cut Construction was ordered by the state to cease and desist from doing business in August 2018, and in December 2019, its license to contractor has expired and has not been renewed.
Brenizer first submitted a Paycheck Protection Program (PPP) loan application requesting $841,000 on May 1, 2020, and was denied. Under the program, approved by Congress at the start of the pandemic, eligible small businesses could get two-year loans to cover payroll costs, mortgage, rent or utility expenses.
Brenizer tried again to get the money 10 days later, but this time he used another person’s name, according to the federal indictment. He allegedly misrepresented that the other unidentified person owned 90% of the business. He also incorrectly stated that the company’s average monthly payroll was $336,400 for about 30 employees, according to the indictment.
Prosecutors alleged Brenizer used fake bank statements and IRS documents in his loan applications, and was approved for a PPP loan on his second attempt.
Brenizer bought a $29,000 Harley-Davidson motorcycle, transferred most of the loan he got to a bank account unrelated to his business, and “paid various retail and entertainment expenses for his benefit. staff,” according to the charges against him.
Brenizer was also named in several state felony charges of forgery of checks, identity theft and theft by fraud, the indictment notes, but he denied having criminal charges pending in his application.
State court records also show Brenizer has previous convictions for criminal sexual behavior, illegal drug possession and breach of a domestic violence no contact order.
Star Tribune editor Stephen Montemayor contributed to this report.