A federal grand jury indicted a former Houston entrepreneur who now resides in Dallas on six counts of wire fraud, conspiracy to commit wire fraud and using funds for unauthorized purchases, according to the U.S. Attorney's Office for the Southern District of Texas.
Kristen Fenrick, 52, was the owner of Klearly Kristen Inc., a business that sold jewelry and accessories between January 2015 to June 2022. When Fenrick submitted a Paycheck Protection Program loan application in 2020, she allegedly exaggerated the number of employees she had and the company's monthly payroll expenses.
She now faces decades in prison for submitting a fraudulent PPP loan application, according to the U.S. district attorney's office. Each wire fraud count could give her 20 years in prison on top of another 10 years for the unauthorized purchases as well as five years for the conspiracy to commit wire fraud charge. If convicted, she may also have to pay $250,000 in fines.
The Paycheck Protection Program was a COVID-era program that helped maintain the payroll of small businesses while they were temporarily shut down. Approximately 11.5 million loans were approved and the federal government gave businesses with a total of $900 billion in loans. Texas alone was the recipient of 938,535 approved loans, according to ProPublica.
In order to obtain the loan, Fenrick allegedly sent the IRS phony documents and paid an unnamed co-conspirator to help her prepare and submit the fraudulent application, according to the court. However, Fenrick maintains her innocence, she said.
"I did not collude with anyone. I was tricked and I was scammed. I did not personally submit the application and I never saw the 941 that was issued on the company's behalf. That is all I have to say," Fenrick told The Dallas Morning News over LinkedIn.
Fenrick is one of many who allegedly used PPP loans for duplicitous purposes. In June 2020, she was approved for a loan amounting to $405,340. She was supposed to use the money for her business but instead used it on personal purchases, like a luxury vehicle, according to the court.
At one point, the Small Business Administration forgave her loan as authorities were under the impression that she had more employees and significantly higher payroll expenses than she actually did, according to the court.
She may have also not stopped at PPP loans. Fenrick allegedly made various attempts to nab an Economic Injury Disaster Loan, another program that was responsible for helping small businesses make it by during the COVID-19 pandemic.
In total, she could face 45 years in prison for her alleged crimes.
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