Career criminal conned inmates while in jail on separate fraud charges, prosecutors claim

Even while he was in jail awaiting sentencing for fraudulently seeking $4.7 million (£3.4 million) in Paycheck Protection Program funds, Michael Moller couldn’t help but carry out one more con, prosecutors said.

Moller, 42, persuaded two of his fellow inmates at a Rhode Island jail that he could help them with their criminal and immigration cases, according to court documents. He knew a lawyer who could help.

It wasn’t until after $17,000 (£12,000) changed hands that the men realised the supposed lawyer didn’t exist.

The FBI caught on, and Moller agreed to admit guilt to avoid further fraud charges. In doing so, he allowed the court to consider the crime in his sentencing for the original fraud charge.

On Tuesday, a federal judge in Rhode Island sentenced Moller to nearly seven years in prison.

“Moller is simply incapable of stopping himself from defrauding others,” federal prosecutors said in the sentencing memorandum. “During a period in which one would imagine that Moller would be on his best behavior in an effort to convince the Court that he was remorseful for his prior conduct, he did the exact opposite by orchestrating yet another scheme to defraud people with whom he came in contact.”

Moller’s lawyer did not immediately respond to a request for comment late Wednesday.

His case is the latest example of the government cracking down on abuse of the PPP, a federal program meant to relieve financial stresses for employers during the pandemic that’s run by the Small Business Administration. Prosecutors have charged hundreds of people with abusing the program.

In May, a Southern California businessman was arrested and charged with submitting applications with stolen or counterfeit information that earned him $5 million in aid. He also laundered the funds, prosecutors said, and used some of the money to buy three luxury cars. Earlier this month, a Massachusetts man who faked his own suicide to evade arrest for attempting to scam the government out of $543,000 (£397,000) in PPP loans was sentenced to four years in federal prison.

Moller, who had pleaded guilty in October 2020 for the PPP fraud, was taken to a detention facility in Central Falls, Rhode Island as he awaited his sentencing hearing.

He began his lawyer scam in June, prosecutors said. Over the span of two months, Moller persuaded two other inmates that they could get out of jail - they just needed to pay for it. One of the men had his wife deliver $5,000 (£3,700) in cash to Moller’s girlfriend. The other sent his friend to deliver about $12,000 (about £9,000), court documents said.

“One of the victims reported that Moller actually told him to pack his belongings because the attorney Moller had supposedly hired had arranged for bail to be posted,” prosecutors said.

Instead of using the cash to bail out the two men, Moller’s girlfriend allegedly used the funds for gambling, marijuana and Moller’s commissary account, investigators learned. The FBI built its case by listening in on Moller’s phone calls after being tipped off by the inmates.

Moller has a history of fraud and exaggerating the truth, prosecutors said. An Army veteran, the Middletown, Rhode Island, man claimed he had post-traumatic stress disorder from his time in a “covert ops” unit, court documents said. He asserted that he hunted down terrorists, was stabbed in the back during combat and killed enemy fighters.

Investigators quickly learned none of those facts were true. Military records showed he enlisted in 1997 and was honorably discharged three years later. He spent a few months in Kuwait but never saw active combat, according to court documents. He was never injured, prosecutors said.

Moller was “a career criminal,” prosecutors said. He has been convicted nine times in Massachusetts and Rhode Island for lying to get money and forcibly stealing money.

He has also been convicted twice in federal court, including once for tax fraud, according to prosecutors. In the tax fraud case, he was sentenced to six months of home confinement.

But while serving his house arrest and wearing an ankle monitor, he managed to commit four bank robberies in Massachusetts in 2011 brandishing “what appeared to be a firearm (later determined to be a BB gun) and forced bank customers and employees to lie down on the ground,” prosecutors said.

He was sentenced to 109 months in prison and three years of supervised release.

It was during that time on supervised release that Moller embarked on the extensive PPP fraud scheme, prosecutors said. From April to August 2020, the Rhode Island man allegedly submitted 11 fraudulent loan applications totaling over $4.7 million (£3.4 million). In the end, he received $699,251 (£510,764).

Evidence shows that Moller used his and his father’s names for the applications, according to prosecutors. He also used his girlfriend’s son’s and brother’s names without their knowledge or consent.

He submitted fabricated tax returns and received $212,100 (£154,927) for a fake company called “Top Notch Tile” that supposedly employed 10 people; he received over $172,000 (£125,637) for a business called “TNT Tile” under his father’s name; and he got another $200,000 (£146,089) for a faux company he claimed belonged to his girlfriend’s brother called “A Top Notch Remodel,” prosecutors said.

Moller also unsuccessfully applied to eight different banks using his girlfriend’s 21-year-old son’s personal information. The applications ranged from almost $300,000 ( about £219,000) to over $734,000 (£536,000), court documents show.

Moller spent most of the money on “personal expenses including trips to Las Vegas and New Hampshire, numerous visits to local casinos, the purchase of a Camaro automobile, the renovation of his residence and online video gaming,” court documents said.

Federal prosecutors called the scheme “appalling” and said it took advantage of a country “reeling from the Covid-19 pandemic and the shutdown of businesses nationwide.”

“He saw the economic emergency created by the pandemic simply as an opportunity to make himself rich by taking for himself what was meant for those in need,” prosecutors said.

Moller was arrested in September 2020. The government seized about $126,000 (£92,000) in cash and from a bank account in Moller’s name.

A federal judge sentenced Moller to 82 months and one day, followed by three years of supervised release. He is also ordered to pay almost $600,000 (£438,000) in restitution.

The Washington Post