A Castle Rock man who took out millions in fraudulent loans against his bankrupt businesses during the COVID-19 pandemic will spend nearly two years in federal prison, federal officials announced Monday.
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U.S. District Judge Daniel Domenico sentenced Joshua Lybolt, 47, in July to 20 months in federal prison and ordered him to pay more than $5.3 million in restitution, according to a news release from the U.S. Attorney’s Office.
Lybolt took a deal and pleaded guilty in March to one count of wire fraud and one count of money laundering, which dropped four additional counts of wire fraud and seven counts of money laundering from his case, federal court records show. Together, those two charges carry a maximum sentence of 30 years in prison, according to a copy of Lybolt’s plea agreement.
The advised sentencing range in Lybolt’s plea agreement was roughly 4 to 5 years, but “the judge saw the complete picture,” said Todd Spodek, Lybolt’s attorney.
“Your Honor’s ruling recognizes that this case was a complete anomaly in an otherwise honorable life,” Spodek said in a statement. “The Court recognized who Josh Lybolt was before this isolated chapter, who he has been since, and who he truly is at his core.”
Between April 2020 and August 2022, Lybolt took out roughly $4.95 million in COVID-19 Economic Injury Disaster Loans and $41,667 from the Paycheck Protection Program, according to the U.S. Attorney’s Office.
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Lybolt previously owned businesses in Indiana and filed for bankruptcy before moving to Colorado, where he applied for those fraudulent loans on behalf of the bankrupt businesses, according to the release. His businesses — Prime Real Estate Corp., Broker Life, JMXE Capital and Lifstyl Real Estate — were not in operation on the dates required to receive COVID-19 funds.
By declaring bankruptcy for those businesses, Lybolt discharged $5 million in debt, federal officials said.
Instead of using the COVID-19 loans to make his creditors whole, Lybolt bought memberships in a country club and a luxury vacation club, four cars and property in Avon, Basalt and Snowmass Village, according to the U.S. Attorney’s Office.
“The United States offered emergency financial assistance to Americans and businesses dealing with the economic impact of the COVID-19 pandemic. But this defendant misdirected those funds for personal luxuries,” FBI Denver Special Agent in Charge Amanda Koldjeski said in a statement.
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