Park Forest businessman sentenced to 4 years for committing COVID-19 relief fraud while on home confinement

PARK FOREST, Ill. - A Park Forest businessman was sentenced to four years in federal prison for committing COVID-19 relief fraud while on home confinement for other financial crimes. 

Carlos Smith, 58, began submitting fraudulent applications for government-backed loans intended to support businesses that were suffering economic effects from the COVID-19 pandemic.

Smith first submitted a fraudulent application in April 2020 for the Economic Injury Disaster Loan (EIDL) Program, which is run by the Small Business Administration.

He was on home confinement at the time.

After obtaining the EIDL funds and while serving the supervised release portion of his prior sentence, Smith fraudulently sought and obtained a second loan.

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This loan was through the Paycheck Protection Program.

In both applications, Smith lied about the condition and performance of his purported business, CLS Financial Services, Inc., which did not operate during the year prior to the pandemic when he was incarcerated.

In the PPP application, Smith also lied about his criminal history and submitted fake tax documents, officials said. 

Smith received about $421,900 between the two loans.

He pleaded guilty to one count of wire fraud and one count of money laundering on June 22, 2022.

The sentence was imposed last week.

Anyone with information about attempted fraud involving COVID-19 can report it to the Department of Justice by calling the National Center for Disaster Fraud Hotline at 866-720-5721, or filing an online complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.