U.S. Attorney's Office pursues COVID fraudsters

YAKIMA — U.S. Attorney for the Eastern District of Washington Vanessa R. Waldref, announced that BNL Technical Services, LLC has pleaded guilty to fraudulently obtaining nearly $500,0000 through a scheme to secure COVID-19 relief funding, according to an Oct. 22 press release. 

Chief U.S. District Judge Stanley A. Bastian accepted BNL's plea and scheduled sentencing for March 11, 2025, at 1:30 p.m., according to the release. The owner of NBL, Wilson Pershing Stevenson III, agreed to pay around $1.1 million dollars in his settlement.  

The plea agreement, along with information disclosed during court proceedings, revealed that between 2020 and 2021, BNL provided contract labor services to prime contractors at the Hanford Site. According to the release, despite receiving payments for labor costs from the Department of Energy throughout the pandemic, including times when employees were not physically present on-site, BNL applied for and received a Paycheck Protection Program loan in April 2020. 

The PPP, created as part of the CARES Act in March 2020, was intended to support small businesses affected by the COVID-19 pandemic. Under the program, loans were fully guaranteed by the United States and could be forgiven if used for eligible expenses, primarily payroll. However, BNL misused these funds, as BNL employees’ pay and benefits were already covered by DOE contract funds and other federal sources, including the Veterans Administration. 

Shortly after receiving the funds, BNL reportedly misappropriated more than $424,230 of the PPP loan for unauthorized expenditures. In August 2021, BNL, through owner Wilson Pershing Stevenson III, falsely certified that the loan proceeds were used appropriately, thus securing forgiveness for the loan. 

“These critical and limited COVID-19 funds were set aside to help small businesses stay afloat during a deadly pandemic,” said U.S. Attorney Waldref in the press release. “BNL fraudulently obtained these funds and then illegally used the money for their own purpose."  

Waldref praised her office’s COVID-19 Fraud Strike Force for holding fraudsters accountable, she said this protects the local economy and small businesses. 

“Today’s guilty plea should send a message that we will diligently pursue those who would illegally line their pockets at the expense of the taxpayer,” Dimitriana Nikolov, Special Agent in Charge of the Department of Veterans Affairs Office of Inspector General’s Northwest Field Office said in the press release. “The VA OIG will continue to work with our law enforcement partners as part of the COVID-19 Strike Force to investigate fraud against relief programs intended to support bona fide recipients.” 

The investigation involved multiple agencies, including the Department of Energy, the Small Business Administration, and the VA Office of Inspector General. Assistant U.S. Attorneys Dan Fruchter and Tyler H.L. Tornabene are prosecuting the case on behalf of the United States. 

“The misuse of pandemic relief funds intended to support struggling small businesses is a serious offense that undermines the integrity of critical assistance programs,” said SBA OIG’s Western Region Special Agent in Charge Weston King in the press release. “Our office will remain steadfast in pursuing those who use such vital resources for personal gain. I want to thank the U.S. Attorney’s office and our law enforcement partners for their collaboration and dedication to justice in this case.” 

BNL was not the only one caught fraudulently using COVID funds recently.

Waldref's office released another statement Oct. 21 regarding a Spokane dermatologist and his associated businesses for allegedly fraudulently obtaining and using around $1.5 million in relief funds to purchase luxury sports cars, buy real estate and pay off personal debt.  

The Indictment announced Monday charges William Philip Werschler, age 66, of Spokane, along with his businesses Spokane Dermatology Clinic, Premier Clinical Research L.L.C., and 3rd and Sherman Plaza L.L.C., with 23 counts of fraud in connection with how Werschler and his businesses allegedly spent the loans.  

The indictment alleges that he used the funds to pay for over half of the $575,000 house in Scottsdale, Arizona, nearly $170,000 for a 2011 Porsche, about $90,000 for a 1997 Porsche, about $124,000 to pay off a loan for a storage unit that was holding cars, jet skis and a boat. He also allegedly used just less than $290,000 and $550,000 to purchase two properties across from his clinic.