Deepwater man sentenced for $500,000 CARES Act fraud

Date: April 23, 2024

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A Deepwater, Mo., man was sentenced in federal court today for fraudulently obtaining more than $500,000 in Paycheck Protection Program (PPP) loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Brian Ruth, Sr. was sentenced by U.S. District Judge Roseann Ketchmark to nine years in federal prison without parole. The court also ordered Ruth to pay a $15,000 fine, to pay $522,765 in restitution to the Small Business Administration, and to forfeit to the government $336,000. Ruth was taken into custody immediately following the hearing to begin serving his prison term.

On May 5, 2021, Ruth pleaded guilty to one count of wire fraud and two counts of money laundering. Ruth admitted that he applied online in May and June 2020, and received three PPP loans totaling $522,765 for three separate business entities. Each of the loan applications contained materially false statements and included fraudulent supporting documents. Ruth, who was convicted in 2018 of filing false or fraudulent tax returns, falsely claimed on his PPP loan documents that he had not been convicted of a fraud offense within the last five years of applying for these loans.

Ruth falsely claimed his three businesses were operational and employed numerous individuals in February 2020, when in reality, the businesses had not been open or operational and did not employ anyone.

Ruth also admitted that he directed the fraudulently obtained PPP loan proceeds to be wired to his bank accounts. According to court documents, at least five bank accounts under Ruth's name were seized in an effort to recover some of the monies he had fraudulently stolen. When Ruth's bank accounts were seized by law enforcement, they contained less than $6 in all of the five accounts collectively. Ruth spent all of the money he stole within about five months to fund his luxurious lifestyle.

Ruth used the proceeds of his fraud to gamble, purchase real estate, and purchase a 2016 Cadillac, a 2020 Dodge Charger, and a 2017 Dodge Challenger. Ruth traded the Cadillac and the Charger (along with $27,415) to purchase the Challenger.

According to court documents, Ruth has prior convictions for 10 felonies and 11 misdemeanors that include stealing, passing bad checks, theft, identity theft, violating protection orders, filing false tax returns, and immoral conduct with a minor. He has been arrested and/or charged with an additional 23 felony and 26 misdemeanor offenses throughout his life, including passing bad checks, trespassing, identity theft, fraudulent use of a credit card, burglary, and possessing a dangerous weapon. Ruth has not gone a single year in his life in which he has not been arrested and/or convicted for some type of fraud or other criminal offense.

This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by IRS-Criminal Investigation.