Urbandale Business Man Sentenced to 24 Months in Federal Prison for PPP Loan Fraud and Bankruptcy Fraud

DES MOINES, Iowa -An Urbandale man was sentenced on October 1, 2026 to 24 months in federal prison for making false statements on a Small Business Administration (SBA) Paycheck Protection Program (PPP) loan application and false declarations during subsequent bankruptcy proceedings.

According to public court documents and evidence presented at sentencing, Henry J. Schappert, 58, applied for and received a $265,567 PPP loan on behalf of his business, Allied Exteriors, in 2021. On the loan application, Schappert inflated Allied Exterior's gross revenue, number of employees, and cost of goods sold, and submitted falsified tax documents in support.

Approximately three years later, in July 2024, Schappert filed for bankruptcy. In his bankruptcy petition, schedules, and statement of financial affairs, Schappert made multiple material false statements and declarations. These included misstatements about his income, prior businesses, and financial accounts. Schappert's false statements attempted to conceal hundreds of thousands of dollars from his creditors.

After completing his term of imprisonment, Schappert will be required to serve a five-year term of supervised release. There is no parole in the federal system. Schappert was also ordered to pay $265,567 in restitution.

United States Attorney David C. Waterman of the Southern District of Iowa made the announcement. The Federal Bureau of Investigation investigated the case with assistance from the Office of the United States Trustee. Assistant United States Attorney Joseph Lubben prosecuted the case.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division ("Fraud Division"). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

The Fraud Section leads the Criminal Division's prosecution of fraud schemes that exploit the Paycheck Protection Program (PPP). Since the inception of the CARES Act, the Fraud Section has prosecuted over 150 defendants in more than 95 criminal cases and has seized over $75 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at https://www.justice.gov/opa/pr/justice-department-takes-action-against-covid-19-fraud