An Independence, Missouri woman has pleaded guilty in federal court to her involvement in a fraud scheme that targeted the U.S. Small Business Administration and several state governments.
Cathy M. Kelley, 69, admitted to knowingly receiving stolen government funds. According to court documents, Kelley received $59,900 in Economic Injury Disaster Loan proceeds from the U.S. Small Business Administration in September 2020 after another individual submitted a fraudulent application for the money. After obtaining the funds, Kelley used them for personal expenses and made large cash withdrawals.
Kelley also acknowledged that during 2020 and 2021 she knowingly accepted stolen unemployment benefits from multiple states, including Washington, Massachusetts, Colorado, Florida, Kansas, California, and Nevada. She was aware these benefits had been fraudulently obtained by others and received them through financial accounts under her control as well as state-issued debit cards sent to her residence. Kelley then converted the funds for personal use and for others’ benefit. As part of her plea agreement, she admitted that these unemployment benefits included federal funds and totaled at least $250,000 over the course of her actions.
Under federal law, Kelley faces up to 10 years in prison without parole. The actual sentence will be determined by the court based on advisory guidelines and other statutory factors. Sentencing is scheduled for January 6, 2026.
The case is being prosecuted by Assistant U.S. Attorney Nicholas P. Heberle following an investigation by the U.S. Department of Homeland Security Office of Inspector General; U.S. Department of Labor Office of Inspector General; and U.S. Postal Inspection Service.
