Anchorage hotel manager to pay government $397,000 after fraudulently receiving COVID relief funds
ANCHORAGE, Alaska (KTUU) - An Anchorage hotel manager will pay $397,990 to the federal government after admitting he made false statements on applications for federal CARES Act money, the program intended to support businesses temporarily losing revenue during the COVID-19 pandemic.
Bob Gross, 65, fraudulently received $164,000 in small business loans and advances through the Economic Injury Disaster Loan Program, under part of the Coronavirus Aid, Relief and Economic Security Act, according to a release from the U.S. Attorney’s Office, District of Alaska. That portion of funds was distributed based on false statements about the revenue, number of employees, and related wages for six companies Gross had an ownership interest in.
The six entities include five real estate companies and an LLC that does business as the Pubhouse restaurant in the Inlet Towers hotel, where Gross is the general manager.
According to the settlement agreement, Bistro IT, LLC, which Gross is a part owner of, received $150,000 from the economic loan program, and certified that the business had not applied for any other federal funding, though the employees and revenue from Bistro IT were included on the funding application for IT LLC, the company that runs the hotel. Gross is listed in business license records as a manager of that company, but is not an owner.
The other businesses, partially or fully-owned by Gross, are Glacier State Services, Inc; RB Enterprises, LLC; Meritage Management Company, LLC; AK Denali Group, LLC; and 32 Mile Investments, LLC. Each received between $2,000 and $5,000 in economic disaster loans or advances, based on statements of their 2019 revenue and number of employees. However, the settlement says the companies’ revenues were actually either zero or a real estate loss, and the companies paid no wages to the only employees, which were listed as Gross and his respective business partners.
The U.S. Attorney’s Office says the monetary settlement is part of an agreement to not criminally prosecute Gross, and it includes repayment of the illegally-obtained $164,000 plus $242,990 in damages to the federal government. The loans would have had to be paid back regardless, as the loan program does not have a forgiveness mechanism, according to the U.S. Attorney’s Office. Gross admitted making fraudulent statements as part of the agreement.
Reached by phone early Friday afternoon, Gross said he would get back to an Alaska’s News Source reporter. He had not responded as of publication time.
The Economic Injury Disaster Loan Program was designed to help small businesses experiencing a temporary loss of revenue. The Justice Department asks anyone with information about fraud involving COVID-19 relief funds to call the National Center for Disaster Fraud Hotline at 866-720-5721 or file an online complaint form here.
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