Founders of PuroTrader Plead Guilty to PPP Fraud (Update)

The founder and ceo of PuroTrader.com, a cigar-selling platform, has been indicted on multiple counts of bank fraud, wire fraud, and attempted wire fraud according to a press release from the Department of Justice’s New Hampshire office.

Pierre Rogers, 43 of Irvine, Calif, and Joshua Leavitt, 40 of Northwood, N.H., were charged with six counts of bank fraud, one count of wire fraud, two counts of attempted wire fraud and one count of money laundering related to defrauding the government through fraudulent loans through the government’s Paycheck Protection Program (PPP) which was meant to help small businesses during the COVID-19 pandemic by issuing forgivable loans.

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Update (July 29, 2022) — Joshua Leavitt has agreed to plead guilty to one count of bank fraud and one count of wire fraud. In exchange for guilty pleases for Count 4 and Count 7, the U.S. Attorney for the District of New Hampshire has agreed to dismiss Counts 1, 2, 3, 6, 8 and 9. In addition, the prosecution will recommend to the judge the lowest sentence in the sentencing guidelines for these charges. 

Update (Oct. 31, 2022) — Last week, Jane E. Young, the U.S. Attorney for the District of New Hampshire, announced that Pierre Rogers has pled guilty to conspiracy to commit bank fraud and wire fraud. As part of this agreement, prosecutors and Rogers have agreed to a sentence of 41 months imprisonment and repayments of $803,756. Of note, the terms of this agreement will need to be approved by the court. 

Leavitt is scheduled to be sentenced on Jan. 11, 2023; Rogers is scheduled to be sentenced on Jan. 31, 2023.

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There were rules about who could qualify for the loans and other rules about how the money could be used. If a business used the money in specific ways—such as for payroll, rent or utilities—a company could apply to have the loan forgiven.

According to the government, Rogers and Leavitt applied for 14 loans including roughly $2 million in PPP loans and $3 million in loans from the Small Business Administration’s Economic Injury Disaster Loan (EIDL) loans. The government says that the two falsified tax documents as well as payroll and earning statements to secure these loans. The pair applied for loans for a variety of companies including Dark Matter Associates, Demeter Project, Monticello Transnational, Puro Trader, Puro Lounge, Puro Group and Sunju, which the government says Rogers and Leavitt controlled.

It also alleges Rogers used at least some of the money for personal use. For example, the government accuses Rogers and Leavitt of obtaining a fraudulent loan for Puro Group for $175,000—presumably in May 2020—and then says Rogers wired $107,780 of that loan to Private Collection Motors to purchase a 2011 Rolls Royce Ghost, a luxury car.

PuroTrader is an online cigar-selling platform that allows consumers and retailers to sell their cigars to consumers using both a fixed pricing model as well as auctions. It also contains an online database system that allows for users to place offers on other people’s cigars similar to StockX. In addition, Rogers has promoted a number of other associated businesses for PuroTrader including a cigar subscription service, events, social media, a planned lounge and a wine-based business that would be similar to PuroTrader. The company filed plans to raise roughly $1 million through a stock offering in 2021.

It’s unclear how large PuroTrader is because some of Rogers’ statements about the company are difficult to believe. For example, he told Boveda that PuroTrader sold more than 50,000 boxes of cigars in 2016 and was on track to triple that number in 2017.

Rogers was arrested in Hawaii on June 30 and released on a $50,000 bond. Counts 1-7 carry fines of up to $1 million and up to 30 years in prison.

Disclosure: Like many small businesses, halfwheel’s parent company Rueda Media, LLC participated in the PPP program.

Update (July 29, 2022) — Leavitt has pled guilty. This post was originally published on July 7, 2022.

Update (Oct. 31, 2022) — Rogers had pled guilty.