Nearly 7 years in prison for St. Paul man who fraudulently obtained $841,000 in COVID loans

A 33-year-old St. Paul man has received a nearly seven-year prison sentence for fraudulently obtaining $841,000 in loans from the federal Paycheck Protection Program created to help small businesses harmed by COVID-19.

Kyle W. Brenizer was sentenced Thursday in U.S. District Court in St. Paul after pleading guilty to wire fraud, money laundering and aggravated identity theft in connection with the loans for his defunct construction company.

Ahead of sentencing, Brenizer's attorney argued for a sentence of no more than 4¼ years in prison. Kevin DeVore noted that his client quickly admitted to the allegations and has a stable life waiting for him living with his sister whenever he leaves prison.

However, the prosecution's request for a sentence of 6¾ years prevailed.

"He saw an opportunity to enrich himself, and he took it," prosecutors countered in a pre-sentence filing. "The defendant intentionally, and knowingly, diverted over $800,000 in coronavirus aid to his own fake businesses.

"That money, which was meant to help legitimate businesses stay afloat and to provide salaries and wages for struggling employees, was instead used for the defendant's lifestyle expenditures and the purchase of a brand-new Harley-Davidson motorcycle."

According to the charges, Brenizer's Brooklyn Park-based True-Cut Construction had been ordered by the state to cease and desist from doing business in August 2018, and in December 2019 its contractor license lapsed and was not renewed.

Brenizer first submitted a loan application for the Paycheck Protection Program (PPP) seeking $841,000 on May 1, 2020, and was denied. Under the program, approved by Congress at the beginning of the pandemic, qualifying small businesses could get two-year loans to cover payroll costs, mortgage, rent or utility expenses.

Brenizer again tried to obtain the money 10 days later, but this time he used the name of another person, according to the federal indictment. He allegedly falsely represented that the other, unidentified person owned 90% of the company. He also falsely stated that the company's average monthly payroll was $336,400 for about 30 employees, the indictment said.

Prosecutors alleged that Brenizer used phony bank statements and IRS documents in his loan applications, and was approved for a PPP loan on his second try.

Brenizer bought the Harley, transferred the bulk of the loan that he obtained to a bank account unrelated to his company, and "paid for various retail and entertainment expenditures for his personal benefit," the charges against him read.