Owner of O’Fallon plumbing company pleads guilty to lying on PPP loan application
The owner of a well-known O’Fallon plumbing, heating and cooling company has admitted lying to get a Paycheck Protection Program loan during the first wave of the COVID-19 pandemic.
Jason Spengler, 45, of O’Fallon, pleaded guilty Wednesday in U.S. District Court for the Southern District of Illinois to one count of making a false statement on a federal loan application.
“Spengler committed the felony offense last year when he filed for assistance from the Paycheck Protection Program (PPP) without disclosing that his business, Spengler Plumbing Company, was in bankruptcy,” according to a news release from U.S. Attorney Steve Weinhoeft’s office.
The company reportedly received a $487,095 loan in April 2020.
Spengler couldn’t be reached for comment Thursday morning. His office referred questions to his attorney, Justin Kuehn, of the Kuehn, Beasley & Young law firm in Belleville.
“At the end of the day, all of the money that resulted from this PPP loan was used in the appropriate way,” Kuehn said. “In other words, the employees were kept on payroll and paid. It was not used to line (Spengler’s) pockets.”
Sentencing is set for Aug. 18 at the federal courthouse in East St. Louis. The judge could enforce the maximum penalty of five years in prison and a fine of up to $250,000 for a Class D felony.
However, the advisory sentencing guideline range is 18 to 24 months in prison and a fine of up to $250,000, according to an April 1 plea agreement in which Spengler promised to pay back the loan amount.
In addition, prosecutors may recommend a reduced penalty if restitution takes place before sentencing under the agreement.
“This is money that will be paid back by Mr. Spengler, money used to make payroll for his numerous employees at a time when the pandemic was keeping them from working,” Kuehn said.
Bankrupt companies not eligible
PPP loans were part of the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, which was enacted in March 2020 to provide emergency financial assistance to Americans suffering economic hardship due to COVID-19.
The Small Business Administration administered the program to qualified businesses that wouldn’t have to pay back loans if they were used for specified purposes, such as employee salaries. Debtors in bankruptcy were not eligible, according to the news release.
“The first question on the loan application asked, ‘Is the applicant ... presently involved in any bankruptcy? Above this question, the application explained that the loan would not be approved if the applicant answered ‘Yes.’”
Prosecutors alleged the following in the Spengler case:
- When Spengler applied for the PPP loan, his company was in bankruptcy, but he checked “No” on the application.
- Because of that false statement to the SBA and lender, he was awarded a $487,095 loan.
- The company was required by law to obtain prior authorization from the bankruptcy court before incurring any new unsecured debt.
- Spengler applied for the loan without notifying the bankruptcy judge, evading safeguards put in place by the SBA and bankruptcy court.
“Together with U.S. Attorney Steve Weinhoeft and our law enforcement partners, we will continue to pursue fraud and abuse in bankruptcy cases,” Nancy J. Gargula, U.S. Trustee for Region 10, stated in the news release.
The U.S. Trustee Program is described as “the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.”
Business founded in early 1970s
Spengler Plumbing, Heating and Cooling was founded in 1971 by Syd Spengler, who initially operated the business out of his O’Fallon basement, according to a history on the company’s website.
Syd Spengler retired in 2007, turning the business over to his son, Jason Spengler.
The company received a Salute to Business Community Service Award in 2016 from O’Fallon-Shiloh Chamber of Commerce. Jason Spengler and his sister, Julie Spengler, were instrumental in creating and maintaining the O’Fallon Veterans’ Monument, according to a BND profile.
In May 2015, heavy winds caused two stone pillars to fall over and crumble. The Spenglers spearheaded a community effort that raised more than $20,000 for restoration with wristband sales and a GoFundMe campaign.
“They didn’t have to do that,” community activist Betty Osborne, now deceased, said at the time.
“But I guess they felt they needed to for their hometown. And that’s what they’re all about. Spengler has been such a positive for O’Fallon. Without them, our veterans monument wouldn’t be as great as it is, period.”
Other community projects by Spengler Plumbing, Heating and Cooling Co. have included:
- Raising tens of thousands of dollars for local fire departments by selling The Men of Spengler Calendars with humorous photos of plumbers posing throughout the St. Louis region.
- Providing free services and repairs to women fighting breast cancer through its Think Pink Initiative.
- Donating labor for construction of O’Fallon Community Pool.
- Adopting a special cause to help fight mental illness through the Karla Smith Foundation.
- Installing new HVAC and air-purification systems at animal shelters through the Spengler Pet Saver Program.
- Helping other organizations and causes, such as the O’Fallon Marching Panthers, NickFest Community Festival and trivia fundraisers for local schools and individuals.
Alleged violations of federal law by Jason Spengler were referred to the U.S. attorney’s office for prosecution by the U.S. Trustee for Region 10, in collaboration with the Southern District of Illinois Bankruptcy Fraud Working Group, according to the news release.
The investigation was conducted by the Small Business Administration Office of the Inspector General. The case is being prosecuted by Assistant U.S. Attorney Peter T. Reed.
This story was originally published April 29, 2021 at 2:43 PM.
