Woman listed as city employee indicted in alleged $2.5M PPP fraud case

BALTIMORE (WBFF) — A woman listed as a Baltimore City employee is facing six federal bank fraud charges after prosecutors say bank accounts under her control received more than $2.5 million through allegedly fraudulent loan applications tied to a federal pandemic-relief program.

Kara DiPietro, 49, of Towson, was indicted on six counts of bank fraud in connection with applications for loans through the Paycheck Protection Program (PPP).

According to the U.S. Attorney’s Office for the District of Maryland, DiPietro served as president and CEO of multiple Maryland companies, including H.M.C., Inc., Holdings Management Company Inc. and Kinetic Capital LLC.

Federal prosecutors allege that between April 2020 and May 2021, DiPietro submitted or caused the submission of more than 20 fraudulent loan applications in the names of those businesses and other similarly named entities.

View the indictment charges below.

The applications sought more than $7.5 million, according to the indictment. Eight were funded, with bank accounts under DiPietro’s control receiving more than $2.5 million in PPP funds.

Prosecutors allege the applications included false or fraudulent employer identification numbers, failed to disclose previous PPP applications and included false certifications about whether the businesses had already received loans through the program.

The PPP was created during the COVID-19 pandemic to provide forgivable loans to small businesses. The money could be used for approved expenses including payroll costs, mortgage interest, rent and utilities.

Federal prosecutors also allege DiPietro caused loan proceeds to be transferred and used for expenses not allowed under the program, including renovations to her personal residence.

DiPietro is listed on Baltimore City’s website as an employee with the Department of General Services’ Fleet Management division.

FOX45 News reached out to Baltimore City officials to ask whether DiPietro is still employed by the city, whether she is currently reporting to work, when the city first learned about the indictment and whether officials plan to take any action.

David Williams with the Taxpayers Protection Alliance told FOX45 News the allegations raise concerns about oversight of pandemic-relief money.

“People expected more out of the government to do more oversight. People expected more out of their fellow citizens not to defraud the system. When you hear about, whether it’s $2.5 million or $2.5 billion, it’s still a lot of money. And people are frustrated at all levels because people entrusted their taxpayer money to help people during the pandemic. And now the trust has been broken.”

Williams also called for the city to take action regarding DiPietro’s employment.

DiPietro has not been found guilty, and the allegations against her have not been proven in court. An indictment is not a finding of guilt, and DiPietro is presumed innocent unless and until proven guilty.

If convicted, DiPietro faces a maximum of 30 years in federal prison for each of the six bank fraud counts. The U.S. Attorney’s Office notes that actual federal sentences are typically below the maximum and are determined by a federal judge.