Bozeman woman gets prison sentence for PPP fraud

A Bozeman woman convicted of bank fraud and money laundering was sentenced to 30 months in prison and five years probation Thursday.

Alaina Garcia, 41, founded a fraudulent property management company, Bluebird Property Rentals LLC, on May 5, 2020, according to a release from the U.S. Attorney’s Office. She used this entity to receive a Payroll Protection Program (PPP) loan for $613,000.

The loan was supposed to assist with payroll taxes for the business’s 32 employees.

“In reality, Garcia and Bluebird Property Rentals LLC had no employees and had never paid payroll taxes,” the release states.

Days after receiving the PPP loan, Garcia transferred $548,000 of the loan proceeds to Axilon Law Group. That money, the release states, was used by Garcia to buy a large property in the Bozeman area.

On July 25, 2020, Garcia applied for and received loan forgiveness, falsely claiming to have used the money on payroll taxes and business mortgage interest payments.

“While business owners and families were struggling during the COVID pandemic, Garcia was scheming to defraud the Paycheck Protection Program for personal gain,” Amanda Prestegard, IRS criminal investigator, said in the release.

According to Garcia’s indictment, she also spent almost $50,000 at Arctic Spas Bozeman and Rocky Mountain Hard Rock Flooring.

Originally charged with 12 counts of fraud and money laundering, Garcia faced an August 2024 indictment outlining additional fraudulent activity totaling nearly $1.5 million in COVID relief.

Through another false entity, Bluebird Pro Rentals LLC, Garcia obtained a second PPP loan of $875,000. In the application, Garcia agreed the funds would cover payroll, mortgage interest, lease and utility payments, under the PPP rules.

“Garcia did not use the proceeds in this manner and instead spent the funds on personal expenses for her private benefit,” the indictment states.

Garcia also obtained a $132,500 Economic Injury Disaster Loan for another nonexistent entity, Bluebird SGA Health, by fabricating $754,000 in gross profits.

Garcia avoided a trial on the multi-million dollar fraud scheme by striking a deal with federal prosecutors in January 2026. Under the terms of the plea agreement, she pleaded guilty to one count of bank fraud and one count of money laundering.

In exchange for her admissions, the government dismissed the remaining 10 counts of the indictment, including the second bank fraud charge and the wire fraud charge.

After pleading guilty in January, Garcia told the Chronicle in February there was more to the story and said “I look forward to quickly clearing my name.”

At the time, Garcia said she admitted guilt instead of going through a drawn-out trial on advice of her legal counsel.

Garcia faced up to 30 years in prison for bank fraud, a maximum $1 million fine, and five years of supervised release. She also faced up to 10 years in prison, a $250,000 fine, and three years of supervised release for money laundering, according to the U.S. Attorney’s Office.

When asked by the Chronicle n February whether the payroll funds could be used to purchase the property, Garcia said funds were spent legally.

“The employees were paid first,” she said, characterizing the perception none of the funding could be used to purchase the property as misunderstood. “I want to reassure my family, friends, clients and colleagues who know me. I humbly ask those who do not know me to reserve judgment until I am provided the opportunity to address these allegations in court.”

Chronicle reporter Dan Astin contributed to this story.