KC Reporter

A Springfield business owner has been sentenced to two years in federal prison for his involvement in a wire fraud conspiracy totaling nearly $14 million. John Michael Felts, 49, was sentenced by U.S. District Judge Stephen R. Bough and ordered to pay restitution of $8,173,736. Felts must also forfeit personal property and real estate acquired through the fraudulent scheme.

Felts pleaded guilty on July 31, 2023, to charges of conspiracy to commit wire fraud and wire fraud. He owned several restaurants including Taco Habitat in Springfield and Branson, Missouri. From January 2018 to September 13, 2022, Felts participated in a scheme to obtain loans under the CARES Act using both legitimate and fake businesses.

The CARES Act was designed to help small businesses affected by the COVID-19 pandemic through Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans. However, Felts misrepresented his businesses' needs in loan applications and used fake documents to secure funds.

Court documents revealed that Felts collaborated with another individual from San Antonio identified as "Individual-1" to apply for PPP loans and EIDLs using false information. They created fictitious companies and identities for this purpose.

An example cited involved Diagnostic Equipment, Inc., which was set up as a sham company. In April 2020, they submitted a fraudulent PPP loan application for this company. After receiving over $1 million from these schemes, Felts used the money for personal expenses including paying off personal debts and purchasing luxury items.

In May 2020, a similar fraudulent loan application was submitted for Taco Habitat in Branson resulting in an additional $310,000 being obtained under false pretenses.

The criminal case against Felts was prosecuted by Assistant U.S. Attorney Casey Clark while Assistant U.S. Attorney Anthony M. Brown is handling the civil case. Both cases were investigated by IRS-Criminal Investigation.

Felts's sentence includes forfeiture of various assets such as real estate properties in Springfield, multiple vehicles including a yacht, valuable jewelry items like Rolex watches, rare sports memorabilia cards featuring athletes Jackie Robinson and Magic Johnson among others.