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Denver man used COVID relief funds for plastic surgery, weight loss, Peloton

Daniel Stonebarger, 50, was sentenced to 3 1/2 years in federal prison for stealing more than $855,000 in federal grants and PPP loans, authorities said.

DENVER — A Highlands Ranch man is going to prison for a scheme in which he stole $855,252 in federal COVID-19 relief funds that he spent on things like plastic surgery, a weight loss program and a Peloton, according to the U.S. Attorney's Office.

As part of a plea agreement, Daniel Stonebarger, 50, was sentenced Thursday in U.S. District Court in Denver to 3 years and 5 months in federal prison. He was ordered to pay back most of what he stole after lying on applications for federal and state COVID1-9 release funds, the U.S. Attorney's Office said in a news release.

Between April 5, 2020, and June 10, 2020, Stonebarger used new and existing business names to apply to the Small Business Administration (SBA) for Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans and Grants, the release says.

He also applied for Colorado Pandemic Unemployment Assistance and got $28,142 from the Colorado Department of Labor and Employment (CDLE), the release says.

Stonebarger then used the fraudulently obtained funds to pay for, among other things, plastic surgery for a relative, a weight loss program, bridal expenses, jewelry, a Peloton, travel and resort expenses.

“This defendant was a criminal opportunist who took advantage of what he saw as easy money through programs created to keep businesses afloat during the pandemic,” said FBI Denver Special Agent in Charge Michael Schneider.

In addition to his prison sentence, Stonebarger got three years of supervised release and was ordered to repay $794,462 in restitution to the SBA and $28,142 to CDLE, according to the release.

“I am thankful and proud of the collaboration between the task force and the U.S. Attorney’s office that enabled us to bring this defendant to justice for defrauding the government," said Colorado Attorney General Phil Weiser, in a statement. "When the public is cheated, we are all cheated and we’ll continue to hold fraudsters accountable."

The sentencing comes a few months after another Coloradan, Anthony Zaghab, 52, of Centennial, pleaded guilty and was sentenced to stealing $708,141 in a similar scheme.

In another Colorado case, federal investigators recovered more than $2 million in fraudulently obtained COVID-19 relief loans in the wake of a 9Wants to Know investigation into a deceased accountant named Gregory J. Folk. Folk was tied to more than 30 bogus and defunct businesses that were approved for $2.8 million in PPP funds.

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