St. Louis Attorney And Former State Rep. John J. Diehl Jr. Admits To Defrauding The SBA Out Of $379,900 

A federal judge accepted a guilty plea from St. Louis attorney John J. Diehl Jr. to one count of wire fraud. Diehl admitted that on March 30, 2020, he applied for an Economic Injury Disaster Loan (EIDL). The EIDL program was designed to help struggling small businesses during the pandemic. Diehl signed a loan authorization and agreement which states:

“He will use all the proceeds of this Loan solely as working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020 and continuing thereafter.”

Feds Bust St. Louis Attorney And Former State Representative Misappropriating EIDL Loan Funds

On April 16, 2020, EIDL advanced Diehl a former state representative $1,000. A week later, Diehl made a $1,320.15 payment to a country club for personal dues and charges. The EIDL forbids using their funds for such expenses.

On June 9, 2020, the SBA wired the remainder of the EIDL loan of $93,900 to his law firm’s account. Diehl then transferred some of the funds to his personal bank accounts. Between June 10, 2020, and August 16, 2021, he used the EIDL funds for unauthorized personal use and purposes.

Those included payments on various personal automobiles and personal credit cards. He also used the money to pay on a personal home mortgage and on a family member’s college tuition. In addition, he used it to pay pool maintenance and country club dues. On Sept. 16, 2020, Diehl also transferred $50,039.55 of the EIDL proceeds to the Diehl Law Group’s retirement plan. However, Diehl was the only participant.  

Diehl Asks For A Loan Modification And More Money 

In March of 2022, Diehl requested an EIDL loan modification. He again pledged that Diehl Law Group will use the funds “to alleviate economic injury caused by disaster.”

On April 12, 2022, the SBA wired additional $285,000 into the Diehl Law Group bank account. Diehl then transferred some of the funds into his personal bank accounts.  

Between April 14, 2022, and June 21, 2023, Diehl used the EIDL funds to pay personal credit cards. In addition, he used it to a St. Louis law firm for a personal legal matter. He also used it to pay college tuition. In addition, he used the money to pay a residential mortgage.  On Sept. 16, 2022, Diehl also inappropriately transferred another $150,000 of the EIDL modified loan proceeds into his retirement plan.

In total, Diehl obtained $379,900 in EIDL loan funds through his fraud scheme.

A federal judge has scheduled a sentencing hearing for Diehl on December 19th. Wire fraud is punishable by up to 20 years in prison and a $250,000 fine or both. Diehl’s lawyer says Diehl has repaid the EIDL loan to the United States Treasury.

In 2015, The Kansas City Star contacted Diehl about exchanges of sexually suggestive text messages between himself and a college freshman and female House intern.

The internship program had been abruptly canceled in April 2015. Missouri Southern State University discovered an “unspecified incident” with a student and Diehl. Analysts say she had an affair with Diehl. A few hours after the Star published a report of the exchanges on May 13, Diehl admitted responsibility. He stated:

“I will begin immediately working to restore the trust of those closest to me and getting back to the important work that is required in the final days of session.”

He later resigned from the Legislature.

In 2023, a Missouri Ethics Commission audit found Diehl opened a bank account in 2015. The bank account held an unreported $52,000 in unreported campaign contributions.

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