Northern Nevada Business Owner Pleads Guilty to Embezzling Nearly $8 Million From a Federal Grant Project

LAS VEGAS - A northern Nevada business owner pleaded guilty today to embezzling more than $7.8 million from "The Lovelock Project," a federally-funded high-speed internet construction project near Lovelock, Nevada, to his personal bank account.

"Stealing public funds intended to connect rural communities is a direct assault on the taxpayers of Nevada," said First Assistant United States Attorney Sigal Chattah for the District of Nevada. "When individuals treat federal grants as personal piggy banks and hide stolen millions in cryptocurrency, they undermine public trust and rob citizens of critical infrastructure. I commend our Nevada State Director at USDA, Alida Ceballos, for the continued partnership with the U.S. Attorney's Office and helping ensure that anyone who defrauds government programs can be aggressively pursued."

"Through multiple fraudulent schemes, the defendant clearly exploited trust to line his pockets," said Special Agent in Charge Christopher S. Delzotto for the FBI Las Vegas Field Office. "The grants were intended to enhance broadband infrastructure in rural communities in Nevada. Instead, the defendant brazenly misappropriated these funds for personal gain. Today's guilty plea ensures he will finally be held fully accountable for exploiting public resources to fund his private lifestyle."

"Fighting waste, fraud, and abuse is essential to our mission at USDA Rural Development, and we are proud to support the Vice President's Pledge to protect Americans from fraud," said Nevada State Director Alida Ceballos for USDA Rural Development. "This plea would not have happened without an all-of-government approach to tackling fraud, and I am deeply thankful to the leadership of First Assistant United States Attorney Sigal Chattah and our partners at DOJ, USDA OIG, and the FBI for their partnership and support for rural Nevada."

According to court documents, Stephen A. Kromer owned Uprise, LLC, a former internet service provider located in Reno, Nevada. In 2022, the United States Department of Agriculture ("USDA") awarded Uprise a $27 million federal grant to construct a high-speed broadband network in rural Lovelock, Nevada, about 100 miles northeast of Reno. The grant was funded by the ReConnect Program, a federal program that promoted the construction of high-speed internet networks in under-utilized rural areas across the United States.

As a condition to receiving the federal grant, Uprise agreed to contribute approximately $9 million toward the cost of the Lovelock project. Uprise obtained this money from the State of Nevada and deposited it into a separate financial account designated solely for the Lovelock Project and overseen by the USDA

From May 2024 through November 2024, Kromer embezzled more than $7.8 million from the ReConnect Program by transferring the money from the designated account to his personal bank account and falsely accounting for the transfers as expenditures for the Lovelock project. The Indictment alleged that Kromer then laundered the embezzled money by subsequently moving the embezzled proceeds from his personal bank account into accounts he held at various cryptocurrency exchanges where the money was converted into cryptocurrency.

Kromer pleaded guilty to one count of federal money laundering. Sentencing is scheduled for March 9, 2027, before United States District Judge Richard F. Boulware II. At sentencing, Kromer faces the maximum statutory penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI and USDA Office of Inspector General investigated the case. Assistant United States Attorneys Steven Myhre and Skyler Pearson are prosecuting the case.

On April 7, the Department of Justice announced the creation of the 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.

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