A St. Louis attorney has admitted to defrauding the U.S. Small Business Administration of nearly $380,000 by illegally obtaining a COVID-19 pandemic relief loan.
John J. Diehl Jr., 60, pleaded guilty in U.S. District Court in St. Louis to one count of wire fraud. According to court documents, Diehl applied for an Economic Injury Disaster Loan (EIDL) on March 30, 2020, claiming the funds would be used as working capital for his law firm during the pandemic. The EIDL program was established to help small businesses manage financial difficulties caused by COVID-19 through low-interest loans intended for operational expenses.
Diehl signed documents certifying that all proceeds from the loan would be used exclusively for business-related costs stemming from the pandemic’s economic impact. However, prosecutors said he diverted funds for personal expenses.
On April 16, 2020, Diehl’s law firm received a $1,000 advance on the EIDL loan. Days later, Diehl paid over $1,300 in country club dues and charges using those funds. In June 2020, his firm received another $93,900 from the program; investigators found that Diehl transferred portions into his personal accounts and spent money on car payments for Tesla, Audi and Jeep vehicles; personal credit card bills; home mortgage payments; college tuition for a family member; pool maintenance; additional country club fees; and cash withdrawals.
On September 16, 2020, Diehl moved over $50,000 from the EIDL proceeds into his firm’s retirement plan account in which he was the sole participant.
In March 2022, Diehl requested a modification of his original loan application and again certified that new funds would address business needs related to the disaster declaration. On April 12 that year, an additional $285,000 was deposited into his firm’s bank account. Prosecutors allege these funds were also misused—covering more personal credit card payments, legal fees for a private matter with another St. Louis law firm, tuition costs and further mortgage payments or cash withdrawals. Another $150,000 went into Diehl’s retirement plan account in September 2022.
Altogether Diehl obtained $379,900 through this scheme.
Sentencing is scheduled for December 19. Wire fraud carries penalties of up to 20 years in prison and fines reaching $250,000 or both imprisonment and financial penalty.
Diehl has repaid all EIDL proceeds to the United States Treasury according to statements made by his attorney Thursday.
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Hal Goldsmith.
