IRS - Internal Revenue Service
10/21/2024 | Press release | Distributed by Public on 10/22/2024 14:55
Spokane dermatologist indicted for using approximately $1.5 million in COVID-19 relief funds to buy Arizona home, sports cars, and other properties
Date: Oct. 21, 2024
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Spokane, WA - Vanessa R. Waldref, United States Attorney for the Eastern District of Washington, announced a federal grand jury has an indicted a Spokane dermatologist, and his associated businesses, for fraudulently obtaining and using approximately $1.5 million dollars in COVID-19 relief funds to purchase luxury sports cars, buy real estate, and pay off personal debt.
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act provided a number of programs through which eligible small businesses could request and obtain relief funding intended to mitigate the economic impacts of the pandemic for small and local businesses. One such program, the Economic Injury Disaster Loan (EIDL) program, provided low interest loans that could be deferred until the conclusion of the pandemic to provide "bridge" funding for small businesses to maintain their operations during shutdowns and other economic circumstances caused by the pandemic. EIDL funds were to be used solely as working capital to alleviate economic injury to a business caused by the COVID-19 disaster, such as paying payroll, health insurance premiums, rent, utilities, and fixed debt payments. EIDL funds were not to be used for personal purposes or to obtain real property or to pay off debts that were not yet due and owing, such as paying more than a fixed monthly payment on a mortgage or other loan.
The Indictment announced today charges William Philip Werschler of Spokane, Washington, along with his businesses Spokane Dermatology Clinic, Premier Clinical Research L.L.C., and 3rd and Sherman Plaza L.L.C., with 23 counts of fraud in connection with how Werschler and his businesses allegedly spent EIDL loans.
Beginning no later than April 2020 and continuing until at least July 2022, Werschler applied for EIDL loans for his businesses: Spokane Dermatology Clinic, Premier Clinical Research, and 3rd and Sherman Plaza L.L.C. In total, Werschler and his businesses received more than $2.9 million in EIDL money.
The Indictment alleges that Werschler used the EIDL funds for personal purchases including over half of the $575,000 purchase price of a house in Scottsdale, Arizona; the purchase of a 2011 Porsche 911 GT3 for $166,687; the purchase of a 1997 Porsche Carrera for $88,687; and $123,960 to pay off a loan for a storage unit at 6720 N. Pittsburg Street that was used to store automobiles, jet skis, and a boat. According to the indictment, Werschler also allegedly used EIDL money to pay off the balance of a loan for property on Grant Street in Spokane, Washington, for $286,792, and $550,000 to purchase two properties across from his Spokane Dermatology Clinic, both contrary to the proper use of EIDL funds.
"Many small and local businesses struggled to stay afloat during the COVID-19 pandemic. The Economic Injury Disaster Loan program was designed to provide those business owners an economic lifeline," stated U.S. Attorney Waldref. "My office has made it a priority to hold fraudsters accountable who used these critical funds to enrich themselves."
This case was investigated by the IRS Criminal Investigation (IRS-CI), the FBI, and the Small Business Administration Office of Inspector General. It is being prosecuted by Assistant United States Attorney Jeremy J. Kelley.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.