(LEX 18) — A Versailles man and former owner of Bluegrass RV has pleaded guilty to wire fraud after officials say he obtained COVID-19 relief loans under false pretenses.
49-year-old Randall “Rocky” Blankenship made the guilty plea before a U.S. district judge Thursday. In his plea agreement, in April 2020, Blankenship submitted four fraudulent applications for Paycheck Protection Program (PPP) loans for Blankenship RV Finance Solutions LLC, RSGG Properties LLC, RSGG Holdings LLC, and RSGG Investments LLC, all business entities he formed.
The loans were part of a program passed by Congress in response to the COVID-19 pandemic. They were designed to provide an incentive for small businesses to keep workers on their payroll during the pandemic. These loans would be forgiven by the United States Small Business Administration, if the borrower established that loan proceeds were used for payroll, rent, or other approved business expenses. The amount of the loan was dependent on the business's payroll.
The U.S. Attorney’s Office of the Eastern District of Kentucky says Blankenship created fake tax documents and payroll records as part of his loan applications. They made it seem his businesses had hundreds of thousands of dollars in quarterly payroll; when in fact, none of the entities had any payroll expense at all. Officials say Blankenship submitted the applications through Kentucky Bank and Independence Bank; and as a result, he obtained fraudulent PPP loans totaling $1,323,829. In his plea, he says he used some of the funds for an RV business he owned (which had already received its own PPP loan and was ineligible for additional loans at the time), as well as personal use, including paying off casino debt and purchasing real estate.
Blankenship is set to be sentenced on March 17, 2022. He faces a maximum of 20 years in prison, a fine of not more than $250,000, and up to three years of supervised release.
Blankenship agreed to pay restitution of $1,323,829.