DETROIT - A Metro Detroit businessman is facing multiple federal charges for his alleged role in a wire fraud and money laundering scheme.
Karl Fultz owns Wheel Effects, Inc., Media Planett, LLC and Karl Fultz Music, LLC.
Recommended Videos
Wheel Effects is a business that designs and manufactures bicycles and wheels, hubs and bicycle accessories. Fultz Music is a purported record company in Metro Detroit. Media Planett is a purported multi-media services provider in Metro Detroit.
Fultz is accused of using the money he received from a Paycheck Protection Program (PPP) loan and transferring the funds to other accounts and not using the money for business purposes. It's also alleged that Fultz falsely provided information on the application for PPP and EIDL funds, including the number of employees employed by the business.
Fultz reportedly requested $866,688 when submitting a false and fraudulent PPP loan application to Kabbage and the Small Business Administration (SBA) on behalf of Wheel Effects.
According to court documents, Fultz claimed in the applications that Wheel Effects had 41 employees. In reality, the business reportedly had few, if any, employees.
Fultz also allegedly claimed that Wheel Effects had an average monthly payroll of $346,676. Court documents claimed the company had little to no payroll expenses.
He also allegedly submitted a false 2019 Schedule C to IRS Tax Form 1040 and a false 2019 IRS Tax Form W-3, claiming that Wheel Effects paid over $4 million in wages in 2019.
Court documents claimed that Fultz submitted false 2019 IRS Tax Forms W-2, reporting fake wages for people who did not work at Wheel Effects and were not employees at the business.
A PPP loan was authorized for Wheel Effects for $866,688. It was electronically transferred into the business' bank account at Independent Bank on Aug. 21, 2020.
Fultz certified that the loan proceeds would be "used only for business-related purposes as specified in the loan application" when he applied for the PPP loan.
Court documents claim that Fultz withdrew $10,000 and transferred another $50,000 on the same date into a different Wheel Effects bank account at Independent Bank.
On Aug. 26, 2020, Fultz transferred by interstate wire about $261,000 of the PPP loan proceeds from Wheel Effects to a Wells Fargo Bank with a California account address.
On Aug. 31, 2020, Fultz withdrew about $22,000 in PPP loans from the Wheel Effects bank account and referenced "Media Planett LLC for Radio & TV" on the Independent Bank withdrawal slip.
The same day, Fultz withdrew $26,000 in PPP loan funding and referenced Fultz Music and "Bike Placement in Music Videos" on the Independent Bank withdrawal slip.
He then withdrew $8,500 in PPP loan funding from the Wheel Effect bank account and referenced "Reimbursement for travel costs" on the Independent Bank withdrawal slip.
On Sept. 3, 2020, Fultz opened a new bank account at Independent Bank and titled it Wheel Effects LLC Payroll Account. On the same day, he transferred about $42,000 from the business account to the payroll account.
On July 31, 2020, Fultz submitted an application to the SBA, claiming Fultz Music had five employees at the time. Court documents claim the information he provided in the application was false.
On June 15, 2021, Fultz submitted an application for an EIDL Targeted Advance and an EIDL Supplemental Targeted Advance for Fultz Music. He allegedly provided information that said Fultz Music had 12 employees at the time. Court documents claim the information he provided was false. The SBA denied the application.
Federal charges
Fultz was charged on May 14, 2025, with one count of wire fraud, five counts of aggravated identity theft and one count of transactional money laundering.