WICHITA, Kan. (KSNW) — On Wednesday, the prosecution began presenting its case in the trial of former Kansas state Rep. Michael Capps. The U.S. Attorney’s Office alleges that Capps cheated the system in order to get federal, state and local financial aid during the coronavirus pandemic.

Capps is being tried on 18 counts:

  • False statement to a bank for a Paycheck Protection Program (PPP) loan
  • Bank fraud – PPP Loan
  • Three counts of false statements to the Small Business Administration (SBA) for an Economic Injury Disaster Loan
  • Three counts of wire fraud, SBA
  • Two counts of wire fraud, Kansas Dept. of Commerce
  • Eight counts of money laundering

Capps entered a not-guilty plea.

Both sides of the case gave opening statements on Monday. Assistant U.S. Attorney Alan Metzger said he will show that Capps “vastly overstated” figures on loan applications. Capps’ attorney, Kurt Kerns, said he will show that the FBI did not do a thorough investigation and did not follow up on evidence that would have cleared Capps.

The prosecution started presenting their evidence Wednesday, calling a couple of Emprise Bank employees to the stand as well as former Wichita City Council member and Capps’ business partner, James Clendenin.

Clendenin was questioned about his role in Midwest Business Group. He testified the company did not have any employees, but they did pay some subcontractors for things like cleaning, photography and social media. Two of those people were Clendenin’s teen and pre-teen daughters. He said they were working to transition those subcontractors to paid employees, adding the PPP loan was paid back with interest.

Investigators say the loans and grants were for Capps’ two businesses, Midwest Business Groups LLC and Krivacy LLC, and his charity, Fourth and Long Foundation. The money in question is approximately $475,000.

The prosecution is expected to continue Thursday morning.