A former NFL player and his business partner, who were co-owners of a construction business and trucking company, and their bookkeeper face fraud charges after prosecutors claim they engaged in an elaborate scheme to obtain $1.4 million through the Paycheck Protection Program (PPP).
On Monday, a federal grand jury indicted Dana C. Howard, 52, of O’Fallon, Illinois, on nine counts, including wire fraud, bankruptcy fraud, failure to pay taxes, making a false statement and conspiracy. Howard, who was drafted in 1995 by the Dallas Cowboys and later released and signed by the St. Louis Rams that year. In 1996, he was signed to play for the Chicago Bears before being injured. He was an All-American linebacker for the University of Illinois.
In the 21-page indictment, filed in the U.S. District Court for the Southern District of Illinois, Howard’s business partner, Richard Scott Myers, 63, of Edwardsville, Illinois, was charged with eight counts, including one count of money laundering, and Glenn Sunnquist, 53, of Swansea, Illinois, was charged with three counts of wire fraud and conspiracy.
What happened?
According to the indictment, Howard and Myers owned a construction company, Zoie LLC, as well as a freight company, Zade Trucking, both located in East St. Louis, Illinois.
Prosecutors allege that Howard and Myers applied for and obtained a $1.43 million loan in April 2020 from Saint Louis Bank through the PPP, administered by the U.S. Small Business Administration to help businesses struggling during the COVID pandemic. The pair claimed that more than $1.3 million of the funds would be used to keep their construction company, Zoie, afloat.
However, prosecutors allege that Howard and Myers used most of the funds meant to keep Zoie operating for their personal use and to pay down nearly $430,000 in debt for their other business, Zade Trucking. Myers used $250,000 to buy a house, according to the indictment.
Court filings allege the business partners used cashier’s checks and wire transfers to move funds meant for the construction company through three banks in St. Louis, Edwardsville and Champaign, Illinois, and wrote checks for themselves for $500,000 apiece from the Zoie account, which they listed as “payroll funds” in the memo line.
Howard and Myers also filed for personal Chapter 11 bankruptcy in the U.S. Southern District of Illinois in 2020 but failed to disclose the PPP funds that were funneled to their personal accounts, according to the indictment.
Myers’ bankruptcy petition, which he filed in June 2020, stated that he had “no cashier’s checks or other negotiable instruments,” even though he retained $200,000 in cashier’s checks from the Zoie PPP loan and failed to disclose that he had bought a home with the funds, according to the indictment. He also allegedly used a cashier’s check from the Zoie account for $100,000 to deposit into the business account for AAA Rentals, which Myers’ now-wife owned.
In December 2020, Howard also filed for Chapter 11 bankruptcy but failed to disclose on his statement of financial affairs that he still possessed $350,000 in cashier’s checks from the Zoie PPP loan account, according to court documents.
Second PPP loan?
On Jan. 11, 2021, Howard and Myers applied for a second PPP loan for nearly $1.43 million, and both answered “no” when asked if either was involved in bankruptcy proceedings. Later that month, the pair applied to have their first PPP loan forgiven while still holding “at least $400,000 worth of cashier’s checks made out to them personally [and] certified that they had used all loan proceeds for eligible expenses, including payroll costs equal to at least 60% of the total loan amount,” according to the indictment.
On their loan forgiveness application, Howard and Myers claimed they spent more than $860,300 on payroll costs and nearly $556,000 on rent or lease payments, according to court filings.
Sunnquist, the bookkeeper for both companies, is accused of falsifying Zoie’s expense records and manipulating old invoices to support the loan’s forgiveness application. In September 2022, SBA denied forgiveness of the loan.
In September 2021, federal prosecutors allege that Sunnquist sent a Saint Louis Bank loan officer a spreadsheet of falsified expenses for Zoie, which included claims of false payments for heavy equipment rental services from St. Louis-based Treloar Enterprises during a time when the company’s owner was in federal prison. Sunnquist later requested invoices from a previous contract with Geo-Cell, which he allegedly doctored to be used to support the revised forgiveness application, according to court documents.
After concerns were raised by the bank about the first forgiveness application, the indictment alleges, Howard submitted a revised PPP loan forgiveness application later that month which claimed payroll costs of nearly $1.3 million and rent or lease payments of over $159,000. Prosecutors allege the revised application claimed rental payments of nearly $970,000 for “Geo-Cell Payroll” and other rental lease payments of $550,000. At that time, Howard and Myers disclosed that they had received income of $95,000 and $90,000, respectively, from the PPP loan, but later revised their income to $20,833 each after the bank informed them that their income had to be capped at that amount.
Court records indicate that the three have not yet appeared in court on the charges after federal prosecutors moved to quash the arrest warrants issued against Howard, Myers and Sunnquist.
The docket states that Howard’s arraignment is set for Dec. 11 before U.S. Magistrate Judge Mark A. Beatty.
“The FBI has opened thousands of investigations across the country targeting COVID-related fraud, working diligently in collaboration with our partners to hold thieves accountable,” said FBI Springfield Special Agent in Charge Christopher Johnson in a statement.
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