Eden Prairie Man Fled To Columbia After COVID Loan Fraud: Feds

ST. PAUL, MN — An Eden Prairie man was sentenced last week to 87 months in federal prison and ordered to pay restitution for fraudulently applying for more than $2.1 million in COVID-19 relief funds and then spending those proceeds on himself, announced U.S. Attorney Andrew M. Luger.

Following a ten-day trial in August, Harold Bennie Kaeding, 75, was convicted by a federal jury on three counts of wire fraud, three counts of aggravated identity theft, and one count of money laundering.

Between March and May 2020, Kaeding applied for more than $2 million in loans through the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (EIDL) Program.

Kaeding used the name of his own close family members to submit the loan applications in the names of six different purported corporate entities, authorities said.

However, these entities were either defunct or not even in existence when the pandemic began, trial evidence showed, according to investigators.

None of the businesses had filed tax returns or reported the payment of wages to a single employee for calendar years 2019 and 2020, prosecutors said.

Kaeding instead fabricated tax documents, manufactured bank statements, and submitted other records to ensure the applications appeared legitimate, according to authorities.

The false statements to lenders include the fake number of employees a given entity employed, the amount of average monthly payroll expenses, and false statements about the intended use of the loan proceeds.

As a result of the fraudulent documents, Kaeding received $1,642,670 in relief funds. But banks detected irregularities and clawed back some of the money.

This left Kaeding with $658,490 in fraud proceeds, which he transferred to bank accounts opened in the names of close family members that he controlled.

Kaeding used the money to get his personal residence out of impending foreclosure, purchase an SUV, and stockpile more than $80,000 in cash, authorities said.

In early 2021, Kaeding fled to Colombia after learning he was under investigation. Law enforcement eventually located Kaeding and successfully deported him back to the United States to face prosecution.