ROCHESTER — A North Chili man who sued the city of Batavia, claiming police brutality, was found guilty Tuesday in U.S. District Court of trying to collect nearly $900,000 in federal Payroll Protection Program funds.
Michael B. Rech, 51, was convicted by a federal jury of 37 counts of bank fraud, wire fraud and money laundering. Each charge carries a maximum penalty of 30 years in prison and a $500,000 fine.
Rech claimed he was director, president and CEO of Guardian of Humanity, Inc., a nonprofit corporation. He also said he was the sole member of Eclipse, an LLC.
Assistant U.S. attorneys Meghan McGuire and Sean Eldridge said Rech applied for eight different PPP loans, which were created to help businesses and organizations recover from pandemic-related losses.
Rech claimed Guardian and Eclipse had employees and that he had been paying them wages, qualifying him for PPP loans.
He attempted to receive $880,000 in loans.
An investigation revealed that Rech did not have any employees and paid wages to nobody.
Rech was, in fact, unemployed and collecting unemployment funds from the state.
Rech received three PPP loans totaling approximately $277,500. Once he received the loans, Rech took the money out of the bank in amounts less than $10,000 to avoid federal reporting requirements.
The Internal Revenue Service recovered all of the funds from two safes in Rech’s home and a bank account that Rech had sole control over. As a result of the trial, all $277,500 was forfeited back to the government.
Rech is to be sentenced March 27.
Rech in 2015 filed a federal lawsuit against the city of Batavia accusing city police of using excessive force. The suit claimed that officers smashed a window on his car, pulled him out of the car and arrested him on fake charges, violating his civil rights.
Rech was seeking at least $2 million in damages.
Rech was arrested in November 2012. According to Daily News records, he was charged with second-degree harassment and endangering the welfare of a child. Police accused him of pushing and knocking down an acquaintance while he was holding a 3-year-old child.
The lawsuit was dismissed in February 2020. Rech’s appeal was denied in August 2020 and he failed to file another appeal on time.
Rech continually failed to pay court fees and attorney fees, according to the suit.
In November 2020, a judge noted that Rech, who asked that he be able to appeal without liability for costs, was not “credible” in his financial affidavits. The court ruled that he asserted that his total monthly income was less than $500 yet he has monthly expenses of more than $910.
Rech, who was bilking PPP funds at the time, could not explain the discrepancy.
Rech in 2016 also filed a civil rights lawsuit against Akron and Alden central schools on behalf of his son, who he claimed was bullied and physically, mentally or sexually abused.
That lawsuit also was dismissed.
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