Massachusetts Woman Indicted for Paycheck Protection Program Fraud and Money Laundering

BOSTON — A Plymouth woman has been indicted by a federal grand jury for fraud and money laundering after a Homeland Security Investigations (HSI) New England case uncovered she was allegedly submitting fraudulent Paycheck Protection Program loan applications on behalf of herself and her father.

Katherine Reynolds, 65, was indicted on two counts of wire fraud and one count of money laundering. Reynolds will be arraigned in federal court on Aug. 8. In May 2024, Reynolds was charged by criminal complaint.

According to the charging documents, Reynolds submitted two fraudulent loan applications seeking loans for herself and her father pursuant to the Paycheck Protection Program. The loan applications falsely claimed that Reynolds and her then-86-year-old father earned over $100,000 per year providing massage services in their home. The loan applications also included fraudulent tax forms that were not filed with the IRS. In addition, on June 25, 2021, Reynolds withdrew $20,000 in cash from the account into which the Paycheck Protection Program loans were paid.

The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000. The charge of money laundering provides for a sentence of up to 10 years and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. sentencing guidelines and statutes that govern the determination of a sentence in a criminal case.

HSI New England Special Agent in Charge Michael J. Krol and acting U.S. Attorney Joshua S. Levy made the announcement Aug. 13. The Massachusetts Office of the Inspector General provided valuable assistance in the investigation.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline via the NCDF Web Complaint Form.

This investigation was led by HSI’s Document and Benefit Fraud Task Force (DBFTF). The DBFTF targets and dismantles transnational criminal organizations and individuals that threaten U.S. national security and public safety. HSI identifies sources of identity and benefit fraud, including document manufacturers, thieves, brokers and even sponsors, attorneys and other U.S.-based people who enable criminals to apply for benefits. HSI works with its partners to address gaps and vulnerabilities in our systems to prevent criminals from committing these crimes.