News Summary

Michael James DeFrees, a 63-year-old from Vancouver, was sentenced to 21 months in federal prison for fraudulently acquiring over $2.5 million in COVID-19 relief funds. He falsely claimed eligibility while on probation for a felony conviction. Along with the sentence, DeFrees must forfeit $1.2 million and pay over $1.3 million in restitution to the SBA. Federal investigators actively recovered stolen funds, involving asset seizures including vehicles and boats, to satisfy obligations and maintain the integrity of assistance programs.

Vancouver, Washington — Developer Sentenced for COVID-19 Relief Fraud and Money Laundering

Michael James DeFrees, a 63-year-old real estate developer based in Vancouver, Washington, has been sentenced to 21 months in federal prison after being found guilty of fraudulently obtaining more than $2.5 million in COVID-19 relief funds and engaging in money laundering activities. The case highlights efforts by federal authorities to combat pandemic-related financial crimes and recover stolen government aid.

Details of the Fraud

Between 2020 and 2022, DeFrees applied for and received multiple COVID-19 relief loans, including Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans. He falsely claimed in his applications that he had no disqualifying criminal convictions and was not on parole or probation, despite being on probation for a 2017 felony related to falsifying records during a bankruptcy proceeding.

DeFrees fraudulently acquired over $2.5 million through these programs. A significant portion of the funds was laundered through an unlisted business entity and used for personal expenses, violating federal laws against money laundering and public funds misuse.

Legal Actions and Asset Seizures

The U.S. Attorney’s Office’s Asset Recovery Unit took steps to recover the stolen funds, filing liens against DeFrees’s properties and seizing various assets. These assets included:

A 2016 Duckworth boat
A 2006 Ford F-350 truck
A 2006 MTI racing boat
Two Honda Yeti snow bikes
A 2011 Land Rover

Proceeds from the sale of these assets and one of DeFrees’s real properties allowed the agency to fully recover the restitution amount of $1,346,481 owed to the Small Business Administration (SBA) as part of his sentencing. The seized funds will be returned to the SBA, while asset forfeiture funds will be directed into the Assets Forfeiture Fund.

Remarks from Authorities

Officials involved in the case emphasized the importance of recovering stolen taxpayer money. The Chief of the Asset Recovery Unit highlighted the coordinated efforts of investigators to ensure accountability for public funds, especially during the challenging circumstances of the pandemic.

Other Notable Cases of COVID-19 Relief Fraud

Brothers Conspiring to Defraud the SBA

Separately, two brothers from Arizona, Eric and Anthony Karnezis, have pleaded guilty to conspiring to commit wire fraud, resulting in nearly $109 million in fraudulent COVID-19 relief loans. Eric submitted at least 350 fake PPP applications, earning approximately $3 million, while Anthony submitted around 140 applications, earning over $957,000.

The brothers falsified numerous documents and misrepresented their business information to secure these funds. They face a maximum sentence of 20 years in prison, along with fines and a court-mandated restitution totaling in the millions. Their sentencing is scheduled for June 20, 2025.

Other Financial Crimes: The Case of Joel Caswell

In another case, Joel Matthew Caswell, age 30, was arrested for multiple financial crimes related to PPP and EIDL programs. Between 2018 and 2022, Caswell applied for funds while falsely claiming business revenues and employee numbers, submitting over $224,000 in false claims.

Court documents include charges of wire fraud and tax evasion. Caswell’s history also reveals multiple lawsuits totaling more than $630,000 for breach of contract and unpaid debts. Conditions of his release include asset restrictions and forfeiture of his passport.

Broader Context

The cases exemplify ongoing efforts by federal authorities to root out fraud related to COVID-19 relief efforts. The government aimed to quickly distribute aid to struggling businesses during the pandemic, but some individuals exploited the system for personal gain. Authorities continue to investigate and prosecute such offenders to protect taxpayer funds and uphold legal standards.

This series of legal actions signifies a broader crackdown on pandemic-related financial crimes, highlighting the importance of accountability and the swift recovery of misappropriated funds. The legal process for the involved individuals remains ongoing, with sentencing scheduled in the coming months.

Deeper Dive: News & Info About This Topic

HERE Resources

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Additional Resources

Author: STAFF HERE BALTIMORE WRITER

BALTIMORE STAFF WRITER The BALTIMORE STAFF WRITER represents the experienced team at HEREBaltimore.com, your go-to source for actionable local news and information in Baltimore, Baltimore County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Baltimore Book Festival, Preakness Stakes, and Artscape. Our coverage extends to key organizations like the Baltimore Chamber of Commerce and Visit Baltimore, plus leading businesses in shipping and healthcare that power the local economy such as the Port of Baltimore and Johns Hopkins Medicine. As part of the broader HERE network, we provide comprehensive, credible insights into Maryland's dynamic landscape.

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