Highlands Ranch man sentenced to federal prison; fraudulently obtained over $800,000 in COVID-19 relief money meant for Colorado small businesses

HIGHLANDS RANCH, Colo. (KJCT) - The Colorado District Attorney’s Office announced on Friday that a Highland Ranch man has been convicted and sentenced to federal prison for obtaining over $800,000 in funds originally intended to help small businesses survive the COVID-19 pandemic.

Daniel Stonebarger, 50, obtained the funds by submitting fraudulent applications for Economic Injury Disaster Loans and Grants, and Paycheck Protection Program loans through the Small Business Administration.

Stonebarger used both existing business names and falsified new ones, as well as falsifying the date of establishment, number of employees, revenue, and costs. Apparently not satisfied, Stonebarger also applied for Colorado Pandemic Unemployment Assistance, which resulted in an additional payout of $28,142 stolen from the Colorado Department of Labor and Employment.

“This defendant took money that was supposed to be used to provide emergency financial assistance to small businesses and individuals suffering adverse economic effects caused by the COVID-19 pandemic,” said United States Attorney Cole Finegan. “Prosecuting pandemic fraud is a priority of the Department of Justice and an ongoing focus for investigators here in Colorado,” Finegan added.

With access to a small fortune, Stonebarger then used the money to pay for plastic surgery for a relative, a weight loss program, bridal expenses, jewelry, a Peloton exercise machine, travel, and resort expenses. “This defendant was a criminal opportunist who took advantage of what he saw as easy money through programs created to keep businesses afloat during the pandemic,” said FBI Denver Special Agent in Charge Michael Schneider.

Stonebarger was sentenced on May 26, 2022 to serve 41 months in federal prison. He will also be expected to serve three years of supervised release and to pay $794,462.08 to the SBA and $28,142 to the CDLE.

The investigation was conducted by the Denver division of the FBI, the U.S. Secret Service, and the Colorado Department of Labor and Employment. Assistant United States Attorneys Martha Paluch, Sarah Weiss, and Tonya Andrews prosecuted the case.