Oregon Recovers Over $2.5 Million From Real Estate Developer Who Faked COVID Loan Applications

Over $1.3 million of funds intended for COVID-19 Relief programs fraudulently obtained by real estate developer and part-time resident of Vancouver, Washington, 63-year-old Michael James DeFrees, has been recovered by the Oregon Attorney General’s Office, along with a forfeiture judgment of $1.2 million.

Oregon AG Recovers Ill-Gotten Covid Funds

Court documents indicate that De Frees submitted loan applications and obtained Economic Injury Disaster Loans (EIDLs) and Paycheck Protection Program (PPP) loans under false pretenses between 2020 and 2022, by falsely indicating that he had never been convicted of any disqualifying criminal offense or had not been recently placed on parole or probation.

At the time, DeFrees was on probation for a 2017 Western District of Washington felony conviction for falsifying records in a bankruptcy proceeding. DeFrees laundered some of the funds through a business entity not listed in his applications and also spent the money on personal expenses.

DeFrees was sentenced to 21 months in federal prison for fraudulently obtaining COVID-19 relief program funds and laundering a portion of the proceeds on February 9, 2024.

He was also ordered to forfeit $1.2 million and pay $1,346,481 in restitution to the U.S. Small Business Administration (SBA). Following the judgment, the Asset Recovery Unit of the U.S. Attorney’s Office filed liens against DeFrees’s real properties and obtained writs of execution to levy and sell his assets.

The total amount of $2,546,481 due in respect of restitution and forfeiture was realized from the sale of DeFrees’s seized assets, including a 2016 Duckworth boat, a 2006 Ford F-350, a 2006 MTI racing boat, two Honda Yeti snow bikes, and a 2011 Land Rover, as well as one property.

The restitution money will be returned to the SBA, and $1.2 million from the forfeiture judgment will be allocated to the Assets Forfeiture Fund, which covers expenses related to the seizure, management, forfeiture, and disposal of forfeitable assets.

Katie de Villiers, Chief of the Asset Recovery Unit for the District of Oregon, said, “Defendants who attempt to shield their assets from collection do so at their own peril, as the U.S. Attorney’s Office will aggressively pursue full payment from defendants who owe restitution to their victims.”