Baltimore employee pleads not guilty to $2.5M PPP fraud charges

A senior Baltimore City employee, Kara DiPietro, pleaded not guilty Monday to six federal bank fraud charges, WBFF reported. Prosecutors allege that bank accounts under her control received more than $2.5 million through fraudulent loan applications tied to the federal Paycheck Protection Program (PPP).

According to the U.S. Attorney’s Office for the District of Maryland, DiPietro served as president and CEO of several Maryland companies, including H.M.C., Inc., Holdings Management Company Inc., and Kinetic Capital LLC. The indictment states that between April 2020 and May 2021, she submitted or caused submission of over 20 fraudulent PPP loan applications in the names of these and other similarly named entities.

The applications sought more than $7.5 million, with eight loans funded and bank accounts under DiPietro’s control receiving over $2.5 million, according to WBFF. Prosecutors allege the applications contained false employer identification numbers, failed to disclose prior PPP loans, and included false certifications about loan receipt status.

The PPP was established during the COVID-19 pandemic to provide forgivable loans to small businesses. DiPietro’s case is ongoing, with legal proceedings expected to continue as the charges are addressed in court.