Trucking Co. Owner Indicted in $280 MILLION Pay-to-Play Scheme is in BIG Trouble… AGAIN
Salt Lake City, UT – A Utah trucking company owner is in trouble with the law (again) after allegedly submitting a fraudulent loan application and subsequently misusing funds from the Paycheck Protection Program (PPP).
Hubert Ivan Ugarte, 52, of Draper, first made headlines in October 2019 when he was one of ten trucking company executives who were indicted in what U.S. Department of Justice (DOJ) officials say was a massive $280 million pay-to-play scheme at the expense of FedEx Ground (FXG).
The case is on-going.
Now, the DOJ is alleging Ugarte knowingly submitted fraudulent loan applications to receive $210,000 in PPP loans through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
According to a criminal complaint, Ugarte, with the assistance of 49-year-old Lisa Bradshaw Rowberry, of Provo, answered “no” to questions on the application asking whether he was under formal criminal charges in any jurisdiction.
Of course, Ugarte is currently facing four counts of wire fraud and six counts of money laundering in the pending FXG case.
Additionally, Ugarte also circled “no” when asked if he had ever been placed on pretrial diversion.
A release from the DOJ reveals Ugarte entered into a two-year pretrial diversion in 1988 to resolve a felony drug possession charge.
Also in the loan application, Ugarte and Rowberry specified “at least 75 percent” of the $210,000 loan would be used for the trucking company’s payroll costs, including bounced payroll checks.
Ugarte’s loan application was denied by two banks upon the discovery he was under federal indictment in the FXG case.
It was at that time, the complaint alleges, Rowberry “told an individual she was going to go with a friend she knew in the banking industry to re-apply for the PPP loan.”
On May 14, the DOJ says Ugarte received a loan in the amount of $210,000 from Transportation Alliance Bank.
Four days after receiving the funds, Ugarte’s business account revealed an automatic withdrawal to Kenworth Sales in an amount just shy of $127,000 — roughly 60 percent of the loan amount.
According to the complaint, Ugarte’s company owed approximately $66,000/month in lease or purchase payments to Kenworth for 13 trucks.
Ugarte and Rowberry are both charged with conspiracy, removal of property to prevent seizure, loan application fraud, wire fraud, and money laundering in the complaint.
The “removal of property to prevent seizure” count in the complaint steams from an insurance payment of almost $61,000 Ugarte received for a wrecked tractor in Nevada after a claim was submitted by Rowberry.
The insurance payment should have been turned over to the Federal Burearu of Investigations (FBI), subject to a seizure warrant in the FXG case.
However, officials claim Rowberry instead deposited the funds into one of Ugarte’s accounts instead.
Ugarte and Rowberry are each facing a potential five year prison sentence for the removal of property to prevent seizure, a possible 10 year sentence for money laundering, up to 20 years for wire fraud, and up to 30 years for loan application fraud and a $1 million fine.
A sealed criminal complaint from a Utah district court in connection to the FXG case reveals Ugarte owns and operates a whopping 17 trucking companies.
Those companies are:
• All My Daughters Trucking Inc.
• Arostegui Trucking, Inc.
• Chasqui Transportation, Inc.
• Diamond Trucking, Inc.
• Frisbu Trucking, Inc.
• I. & G. Ugarte Trucking, Inc.
• I&W Diesel, Inc.
• My Daughters Trucking, Inc.
• Northern Star Trucking, Inc.
• Princess Transport, Inc.
• Princess Trucking Inc.
• Qori Transport Inc.
• Safe Trucking, Inc.
• Stars and Stripes Trucking, Inc.
• Sumise Transport, Inc.
• Transamerican Trucking, Inc.
• Ugarte Enterprises, Inc.
The DOJ did not specify which trucking company was granted the $210,000 PPP loan.
Ugarte remains in custody in Salt Lake County.
An initial court appearance is schedule for July 14.
Rowberry was released last week on conditions of pretrial release.
TNN will continue to follow this case for you.