A Utah trucking company owner already under federal indictment in a pay-to-play fraud case faces new criminal charges for allegedly lying on an application to get a Payycheck Protection Program loan through the coronavirus relief bill.
Hubert Ivan Ugarte, of Draper, also illegally used more than half of the $210,000 he received to make lease or purchase payments on trucks rather than on employee wages, according to an indictment filed in U.S. District Court.
According to the complaint, Ugarte, with help from Lisa Bradshaw Rowberry, of Provo, answered “no” to questions on the application asking whether he was under formal criminal charges in any jurisdiction. His answer was false because he had been indicted in a Utah fraud case when he answered the question, the complaint alleges.
Last October, a federal grand jury indicted Ugarte and others following a multiyear fraud investigation in which it is alleged he bribed employees at the Salt Lake City hub of FedEx Ground to obtain preferential treatment for his trucking companies. Ugarte faces four counts of wire fraud and six counts of money laundering in the case.
Ugarte, 52, also circled “no” on the loan application when asked if he had ever been placed on pretrial diversion. According to the complaint, he entered into a two-year pretrial diversion in 1988 to resolve a felony drug possession charge.
As part of applying for the loan, Ugarte and Rowberry agreed that at least 75% of the money would be used for payroll. Instead of paying workers, including bounced payroll checks, Ugarte allegedly spent nearly $127,000 or about 60% to make payments on 13 Kenworth tractors, according to the indictment.
The complaint also says two banks rejected Ugarte’s loan application after learning he was under federal indictment. Rowberry allegedly told an individual she was going to go with a friend she knew in the banking industry to reapply for the PPP loan. Ugarte received $210,000 from Transportation Alliance Bank on May 14.
Ugarte and Rowberry, 49, are charged with conspiracy, removal of property to prevent seizure, loan application fraud, wire fraud and money laundering. They face up to 20 years in prison if convicted.
The conspiracy and removal of property to prevent seizure counts each carry potential five-year prison sentence, while money laundering has a potential 10-year sentence and wire fraud is up to 20 years.
Rowberry made an initial appearance in federal court last week and was released with conditions. Ugarte, who is in custody, is scheduled to appear in court July 14.