Chili man accused of COVID relief fraud after receiving PPP loans

Ruben Onsu

A Chili man received $277,500 in loans through the Paycheck Protect Program by claiming he had employees to help when he was the sole employee, according to the United States Attorney’s Office. Michael Rech, 49, applied for and received three separate loans between April 2020 and February for his nonprofit […]

A Chili man received $277,500 in loans through the Paycheck Protect Program by claiming he had employees to help when he was the sole employee, according to the United States Attorney’s Office.

Michael Rech, 49, applied for and received three separate loans between April 2020 and February for his nonprofit Guardian of Humanity Inc. and Eclipse LLC. In each instance, Rech, who is charged with wire fraud and money laundering, claimed he was paying wages to employees to qualify for the PPP loans. But investigators learned he didn’t have any employees. 

“Once he received the loans, the defendant took the money out of the bank in amounts less than $10,000 to avoid federal reporting requirements,” prosecutors said.

According to its website, Guardian of Humanity existsto “protect human and civil rights; advocate for the vulnerable; inspire and empower humanity.” It doesn’t indicate how it actually helps people, however. The resource center section of the website states, “Page currently being developed. Will include useful links, resources, library, and news feed.”

Rech applied for the loans through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted into federal law on March 29, 2020. It was designed to help small businesses retain employees and pay other expenses through forgivable loans.

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