A Hanford contractor, and not its owner, was sentenced for COVID relief fraud. How an unusual legal strategy helped him skirt charges

When a wealthy businessman from Tennessee, operating as a subcontractor for the Hanford Nuclear Reservation in Richland, got his first installment of COVID-19 relief funds after the pandemic hit in 2020, prosecutors say he immediately began using taxpayer money to pay off several of his credit cards.

And his wife’s, for $14,500.

Wilson P. Stevenson, III, of Nashville, then transferred about $48,000 of the money that was supposed to be used to pay his employee salaries into his family trust. Then he wrote a $100,000 check to his father, according to federal court documents.

Within a couple of days, in April 2020, Stevenson, owner of BNK Technical Services, is said to have transferred more than $453,000 of the $493,000 he obtained through the U.S. Small Business Administration’s Paycheck Protection Program to personal accounts.

He later obtained a $150,000 loan from the U.S. Small Business Administration under the Emergency Injury Disaster Loan program.

Since that first round of PPP money went well, Stevenson applied for a second.

On Feb. 17, 2021, Stevenson received $819,647.50 of PPP funds that were designated for business owners to keep paying employees, or in some cases, capital expenses incurred from emergency shutdowns as officials scrambled to deal with the fallout from the pandemic.

But the 47-year-old, who lives in a 14,998-square-foot estate with 10 bedrooms, 10 bathrooms and a swimming pool, kept spending, court records say.

The next day, Feb. 18, 2021, he used $150,000 from the second round of PPP funding to pay off his earlier EIDL loan from the PPP. Five days later, Stevenson wrote a check for $122,462.01 from his company’s account holding the PPP funds to pay for “legal fees” incurred prior to the second round of PPP funds. The same day, he transferred $485,000 to his FirstBank Commercial Line of Credit, court records state.

In an email to his banker, Stevenson, wrote “the whole, the COVID situation has been very beneficial to BNL Tech due (sic) the ability to maintain billable FTEs through teleworking arrangements and the prospect of full forgiveness of the PPP funds,” according to court records.

But government bean counters took notice.

Charging a corporation

After investigating, federal prosecutors from the Eastern District of Washington in Spokane submitted evidence to a grand jury and secured an 11-count indictment against Stevenson three years almost to the day after the Hanford subcontractor began spending the PPP money.

Those charges included five counts of wire fraud and three counts of bank fraud, which carry a maximum sentence of 30 years in prison and a fine up to $1 million, although defendants rarely receive prison sentences nearly that severe.

Earlier this week, Acting U.S. Attorney Richard Barker announced that BNL Technical Services was sentenced for a fraudulent scheme to obtain COVID-19 funding and that its owner, Stevenson, was ordered to pay $1,105,498 in restitution during his one year of probation.

“Our COVID-19 Strike Force continues to hold accountable those that fraudulently obtained and misused federal funds set aside to help small businesses in our community,” Barker said in the news release. “I am so proud of our team of prosecutors, led by White Collar Chief Dan Fruchter, for building this strike force and holding accountable those who defrauded the United States.”

But the release did not mention that Fruchter and his colleague, Assistant U.S. Attorney Tyler Tornabene, had to convince a skeptical U.S. District Court Judge Stanley Bastian of why they would agree to convict the business, not Stevenson, of fraud.

At a hearing in Yakima on Aug. 27, Bastian told Fruchter: “The Court is not saying no to the agreement; however, it is not prepared to say yes,” according to docket notations.

“What authority does this corporation have to be charged with a crime and plead guilty to a crime?” Bastian asked. He also noted that he would “need briefing on how an inactive corporation can plead guilty.

“What is the purpose, function, and value to society of putting a dissolved corporation on 5 years of probation?” the judge noted in the docket notation.

Stevenson, the defendant, could not be reached Thursday for comment.

But one of his attorneys, Edward Yarbrough, said during a telephone interview that the defense willingly accepted the government’s offer to settle the case, including a provision that dismisses the criminal charges against Stevenson with prejudice, meaning they can’t be refiled.

“That obviously was music to our ears,” Yarbrough said of the plea agreement. “They felt like they had to have something out of their case. We agreed to let the company plead guilty to a couple of counts.

“Obviously, you can’t lock up a corporation. The only thing that could come from that was the fine.”

Strike Force be with you

In response to Judge Bastian’s questions, Tornabene, the prosecutor, filed a response on Oct. 15 that attempted to answer his questions chapter and verse. Essentially, Tornabene argued that Bastian should approve the plea agreement because judges had done it before.

“It is the position of the United States that the contemplated global resolution is a just one, that it is comparable to other resolutions reached in this District and elsewhere in similar cases, and that it provides for appropriate public accountability for Stevenson and ensures that neither he nor his company receive any financial benefit whatsoever from the charged conduct,” Tornabene wrote.

He noted an earlier prosecution of Holly and Grover Mooers, owners of another Hanford subcontractor business called HPM Corporation.

The Mooers obtained $1.3 million in PPP funds and promptly transferred them to their personal accounts, according to court records.

Like Stevenson, the Mooers faced criminal fraud charges but in the end were allowed to resolve the case by paying $1.3 million in restitution and have their company pay another $1.3 million in fines, and the Mooers also had to pay a $250,000 penalty.

“The total agreed upon payment was almost $3 million,” Tornabene wrote.

Neither Fruchter, who heads up the strike force, nor Tornabene immediately returned calls Thursday seeking comment.

Jeffry Finer, an attorney from Spokane who has defended clients for 40 years and worked 30 years as an adjunct professor at Gonzaga University School of Law, said he can understand how an agreement for clients that allows them to avoid criminal prosecution by paying fines could look odd.

“It’s not a new concept. You absolutely can charge a business with a criminal charge. It has some weirdness to it,” Finer said. “But if you want someone to play nice, this is something you can offer.”

Prosecutors may say, “ ‘We are going to kill your company. We are not going to throw you in prison.’ That is an incentive for someone to give more money and get their life back,” he said.

Cards for employees

Yarbrough, the attorney for Stevenson, said his client thought that paying back the credit cards with PPP money was a legitimate business expense.

Asked why then Stevenson paid off his wife’s card, paid his father and transferred money to his family trust, Yarbrough said it had to do with the family business.

Yarbrough explained that Stevenson’s father owns several properties around Nashville and put them into a family trust. When the pandemic hit, Stevenson paid his employees by drawing money from the trust, borrowing from his father and paying employee salaries with the credit cards.

“Those were legitimate debts incurred to make sure his employees didn’t suffer because the government took so long to make its (PPP) payments,” he said. “I think we were well-prepared to present a case to the jury that Mr. Stevenson had no criminal intent at any time.”

Finer said he also remembers a case years ago when the local U.S. Attorney’s office criminally charged a Hanford contractor with fraud only to have the case end with a full acquittal. Since that time, the office mostly has handled fraud cases as civil matters.

“Juries are kind of weird about this stuff,” Finer said. “It’s much easier” to go civil. “If you go criminal, they are going to appeal it, it’s going to take years, and you may not get any more money.”

Any civil judgment usually results in a “death penalty” in that companies never again get government contracts, he said.

“I think you’ve got to show that you are significantly a bad actor, not a businessman who got a little drunk with the money and fell into it,” Finer said.

He acknowledged that the civil prosecutions tend to benefit white-collar criminals, who tend to be wealthier businesspeople.

“If you rob a bank, I don’t think you would get a deal,” Finer said. “Here’s the other thing: prosecutors have astonishing discretion. How bad was the act? The social harms for robbery are very different than the social harms for fraud.”

Plus, he said the local federal prosecutors are among the best in the country in securing restitution.

According to a news release from January, the “Fraud Strike Force” set up by former U.S. Attorney Vanessa R. Waldref charged 37 defendants and had judges order more than $20 million in restitution in 2024 alone. That includes the $1.1 million from Stevenson.

The local prosecutors “have been pulling fraud money out of Hanford contractors for years,” Finer said. “They’ve gotten multiple seven- and eight-figure cases.”

Yarbrough, the attorney for Stevenson, said his client hopes to put this chapter behind him.

“He’s a legitimate businessman in Nashville who decided to get involved in government contracting in Washington state,” he said. “Like a lot of other businesses, things kind of went haywire. I think he got confused about the rules.”

Judge Bastian placed Stevenson on probation for a year as an incentive to pay the restitution.

“I can assure you and him that the money is in my trust account and is on its way to the clerk as we speak,” Yarbrough said of the $1.1 million settlement. “Or will be soon.”