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Former Escort Accused of COVID Relief Scheme

Crystal Lundberg told a federal judge that getting charged with wire fraud had changed her life for the better. She said that she found legitimate employment and was growing as a person. But federal authorities have charged Lundberg in another scheme to defraud. This time, the victim was the federal government that disbursed $150,000 in loans to Lundberg’s business to keep her payroll going. 

Federal prosecutors now say Lundberg took the loans that were earmarked for COVID relief and spent the money on vacations, legal bills, and other personal expenditures while simultaneously delaying her surrender date to the Bureau of Prisons.

Other problems for Lundberg include Facebook posts she made indicating that her plan was to spend the federal relief money until the feds came and arrested her. Obviously, federal authorities believe that Lundberg wanted one last hurrah before serving her prison sentence. 

Additional Charges Looming

While Lundberg has yet to serve her sentence on charges related to another fraud scheme, it is unclear if she will face new charges related to this scheme. The money would obviously need to be paid back. The fact that it was not used for the express purposes agreed to constitutes fraud.

Lundberg has been on the radar of federal authorities since she was convicted in a $5.79 million fraud. In 2017, she met Scott Kennedy who was a financial executive who had hired her as an escort. Kennedy was sentenced to two years after he told a jury that he had fallen in love with Lundberg. Lundberg was given a 53-month sentence and made arrangements to surrender herself. So far, she has asked for several extensions.

While still waiting to surrender herself, Lundberg’s beauty salon business applied for and received COVID economic relief. These funds were prohibited to anyone with a felony conviction on their record within the past five years. When asked on the application whether or not she had been charged or convicted of a crime in the past five years, Lundberg answered “no,” which is technically fraud. On a second application, Lundberg answered “yes,” but when asked about it, she referenced a state case that had been dismissed. She did not mention the federal case against her. The loan officer awarded her a $150,000 loan.

Elements of a Fraud

If you lie on an official government document, and the government takes this information as true only to later find out that it was a lie, they will charge you with fraud. This applies to any government funds that are earmarked for a specific purpose. The fact that the woman stole emergency funds makes the fraud worse. She will likely be charged with additional crimes and her stay in federal prison will be longer than the initial 53-month sentence.

Talk to a Chicago Criminal Defense Attorney

Are you facing federal fraud charges? Call David Freidberg today at (312) 560-7100 to discuss the matter in greater detail and protect yourself from excessive charges or a speculative

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