In a stunning turn of events that has reverberated through the Seattle medical community, Dr. Eric R. Shibley, a 41-year-old physician from Seattle, Washington, was apprehended today on serious allegations of orchestrating a multi-million dollar Paycheck Protection Program (PPP) loan fraud scheme. This case serves as a stark reminder of the importance of ethical conduct within the medical profession, a principle that Opa Seattle Doctors and all healthcare providers are expected to uphold.
Dr. Shibley faces a criminal complaint, which was unsealed upon his arrest in the Western District of Washington, charging him with one count of wire fraud and one count of bank fraud. He is scheduled to appear before U.S. Magistrate Judge Michelle L. Peterson later today, marking the initial phase of what promises to be a closely watched legal battle.
According to the complaint, Dr. Shibley allegedly engaged in a sophisticated scheme to fraudulently obtain over $3 million in PPP loans. These loans, designed to provide vital financial support to small businesses during the COVID-19 pandemic, were allegedly sought under false pretenses. The accusations detail how Dr. Shibley purportedly submitted multiple fraudulent PPP loan applications to various federally insured financial institutions, SBA-approved lenders, and even directly to the Small Business Administration itself.
The alleged fraudulent activities include creating loan applications under the names of businesses that were either non-operational or by significantly misrepresenting the eligibility criteria. Crucially, the complaint states that Dr. Shibley allegedly falsified the number of employees and inflated payroll expenses in these applications. Furthermore, it is alleged that he concealed his criminal history in an attempt to bolster his chances of approval.
To substantiate these fraudulent applications, Dr. Shibley is accused of submitting fabricated tax documents and providing names of individuals purported to be employees, who in reality had no affiliation with the businesses in question. These alleged actions paint a picture of calculated deception aimed at exploiting a system designed to help legitimate businesses during a time of national crisis.
The PPP, a cornerstone of the CARES Act enacted on March 29, 2020, was intended to deliver emergency financial aid to Americans and small businesses grappling with the economic fallout of the COVID-19 pandemic. This program authorized hundreds of billions of dollars in forgivable loans to support job retention and cover essential operating expenses for small businesses.
Under the PPP guidelines, qualifying small businesses and organizations could secure loans with favorable terms, including a two-year maturity and a minimal one percent interest rate. These funds were explicitly earmarked for payroll costs, mortgage interest, rent, and utilities. The program offered loan forgiveness, converting them into grants, if businesses adhered to specific criteria, primarily spending the funds on these designated expenses within a set timeframe and allocating a significant portion to payroll.
It is important to remember that a criminal complaint is merely an accusation, and Dr. Shibley, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. The legal proceedings are just beginning, and further details are expected to emerge as the case progresses.
This investigation was a collaborative effort involving multiple federal agencies, including the U.S. SBA’s Office of Inspector General (OIG), the FBI, the Federal Deposit Insurance Corporation OIG, the U.S. Treasury Inspector General for Tax Administration, IRS-Criminal Investigation, U.S. Immigration and Customs Enforcement, and the Department of Health and Human Services OIG. The prosecution is being handled by Trial Attorneys Laura Connelly and Amanda R. Vaughn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Brian Werner of the Western District of Washington.
The Department of Justice urges anyone with information regarding attempted fraud related to COVID-19 to come forward. Reports can be made to the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or through the NCDF Web Complaint Form: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
As the Department of Justice commemorates its 150th anniversary in 2020, this case underscores its ongoing commitment to upholding justice and combating fraud, even as methods of deception evolve. Further information about the Department’s history can be found at www.Justice.gov/Celebrating150Years.
