SALT LAKE CITY — A South Jordan rental company owner previously convicted for fraud has admitted in federal court to illegally obtaining a Paycheck Protection Program loan through the coronavirus relief bill.

Michael Leroi Douros, 64, pleaded guilty to two counts of bank fraud, two counts of making a false statement to a bank and money laundering.

U.S. Attorney John Huber said Congress created the program to help people during the COVID-19 pandemic.

“It is disappointing, to say the least, to see an individual use fraud and selfish motives to acquire hundreds of thousands of dollars,” he said. “This money could have been used to help reduce the strain on other employers and their employees, who would have qualified for the funds.”

Douros inflated the size of his payroll and number of employees and made false claims about ownership interests in Epic Rentals, documents in U.S. District Court show. He also falsely stated that he had not been convicted of a felony in the past five years, court documents say. Douros was convicted of securities fraud and communications fraud in 2017.

According to court documents, Zions Bank initially funded a $198,800 PPP loan for Douros, but canceled it after further inspecting his application. The next day, Douros transferred his ownership interest in Epic Rentals, which rents cars, off-road vehicles and camp trailers, to his son.

Douros then applied for a PPP loan at Cache Valley Bank using his son as a “straw” owner, according to court documents. He listed his average monthly payroll at $95,636 when it was far less than that, and claimed nine employees when he had only six, prosecutors say. 

The bank loaned him $239,091 and transferred the money to Epic Rentals. Within a month of receiving the money, the son sent $95,000 to Douros, court documents say.

The money laundering count relates to a $20,000 payroll check made out to Douros from an Epic Rentals bank account.

Douros is scheduled to be sentenced in November. He faces up to 30 years in prison for each of the bank fraud and false statement to a bank counts. Money laundering carries a 10-year sentence. He could also be fined $1 million.