Acting U.S. Attorney Kurt Erskine briefed on his office's efforts to combat fraud related to programs targeting the Paycheck Protection Program (PPP) on the Covid19 Pandemic.
"Together with our state, state and local law enforcement partners, we continue to focus on investigating and prosecuting crimes related to PPP fraud," said Acting US Attorney Kurt R. Erskine. “Unfortunately, when criminals steal this money, they take it out of the hands of those in dire financial straits. Criminals should understand that the diversion of taxpayers' money to help small businesses survive this crisis will be fully investigated and prosecuted. "
The U.S. Attorney's Office for the Northern District of Georgia has charged dozens of people with federal crimes related to PPP fraud, including bank fraud, conspiracy, and money laundering, according to a press release. The cases involve a wide variety of criminal behaviors, including business owners puffing up their payrolls to get bigger credit than they otherwise would have drawn, serial scammers using mailbox companies to apply for credit, and organized criminal networks that handle identical credit applications have submitted and supporting documents on behalf of more than one company. Most of the defendants not only received the loan proceeds under false pretenses, but also used the loan proceeds for prohibited purposes such as buying homes, cars, jewelry, and other luxury goods.
The PPP fraud cases prosecuted by the U.S. Attorney's Office for the Northern District of Georgia include the following:
- United States v Darrell Thomas et al .: 22 defendants were charged with $ 11.1 million in PPP loan fraud directed by Darrell Thomas of Duluth, Georgia. Thomas and his team applied for fraudulent PPP loans on behalf of 14 companies in seven different states. Each loan application claimed the companies had between 59 and 69 employees and included fake IRS tax forms and either a fake bank statement or pay slip, many of which were essentially identical in multiple fraudulent applications. In reality, none of the companies had employees or payrolls. After the PPP loan proceeds were deposited into the companies' accounts, the business owners transferred more than $ 5.5 million to Thomas-controlled accounts and the funds were used to pay for luxury vehicles, jewelry, and other personal expenses. As a result of the investigation, the United States seized nearly $ 4 million in PPP funds, and six participants in the program, including Thomas, pleaded guilty.
- U.S. v Rodericque Jarmaine Thompson et al .: Nine people, including ringleader Rodericque Jarmaine Thompson, pleaded guilty to various federal charges of multiple bank fraud conspiracies aimed at obtaining PPP loans on false pretenses. Each of the loan applications contained identical false information. For example, every loan application falsely claimed the company had 16 employees and a monthly payroll of $ 120,000. Each claim was backed up by fraudulent quarterly tax returns alleging the business owner paid $ 358,819 in quarterly wages. In the application, the business owner assured that the loan proceeds would be used for payroll, utilities and lease payments in accordance with PPP rules. The business owners agreed to repay up to 50 percent of the loan amount to Thompson as a fee for assisting in obtaining the loan. Upon receipt of the credit, the business owners wrote several checks for $ 8,333.33 to individuals selected by Thompson or to their friends and family. All checks are said to be for "payroll" even though the people who received the checks were not employed by the company.
- U.S. v Alicia Quarterman et al .: The U.S. The Postal Inspection Service and the Drug Enforcement Administration have issued a search warrant of Alicia Quarterman's home in Fayetteville, Georgia, in connection with an ongoing drug trafficking investigation. A packet of methamphetamine hidden in dog food containers had been sent to Quarterman's house. During the search, law enforcement officers seized Quarterman's cell phones and discovered a handwritten ledger containing several people's personal and banking information. That ledger, and a subsequent search of Quarterman's cell phone, revealed a suspected Economic Injury Disaster Loans (EIDL) and PPP loan fraud program developed by Quarterman and Katrina Lawson of Houston, Texas, a former deputy sheriff of Fulton County. The program involved filing fraudulent loan applications for businesses on behalf of their friends and family who did not actually own businesses. In total, the program involved 50 different people, including India Middleton of Accokeek, Maryland (an assistant sheriff in Arlington County, Virginia); James McFarland, Tranesha Quarterman (a former Army Police Officer), Darryl Washington, Adarin Jones, and Katie Quarterman of Atlanta, Georgia; Nikia Wakefield of Rockville, Maryland; and Victor Montgomery of Washington, D.C. The ten defendants were charged with wire fraud, bank fraud, postal fraud, money laundering and conspiracy to commit wire fraud in attempting to steal over $ 774,000 on March 16, 2021. The defendants used the loan proceeds to buy luxury vehicles, a motorcycle and an all-terrain four-wheeler.
- USA vs. Maurice Fayne: Maurice Fayne, who starred on the reality TV show Love & Hip Hop: Atlanta, confessed to bank fraud and false information to a financial institution in connection with a fraudulent PPP loan application for 3.7 Millions of dollars owed. Fayne falsely claimed that his trucking company had 107 employees and an average monthly payroll of $ 1,490,200. Fayne certified that the PPP loan proceeds would be used to "retain workers and maintain payroll or make mortgage interest payments, lease payments and utility payments as set out in the Paycheck Protection Program Rule." Instead, Fayne used the PPP loan proceeds to pay his overdue child support, pay the refund owed in a previous fraud case, make payments to employees who helped him run a Ponzi program start a new business adding jewelry buy and lease a Rolls – Royce. In addition, Fayne pleaded guilty to wire fraud and conspiracy related to a Ponzi program that resulted in about 20 people investing over $ 5 million in Fayne's fictional trucking business. Fayne promised to use the investors' money to run the company. Instead, Fayne used investor money to pay off his personal debts and expenses, and to fund his extravagant lifestyle.
On May 17, 2021, U.S. Attorney General Merrick Garland established the COVID-19 Fraud Enforcement Task Force to pool the Department of Justice's resources in working with government agencies to step up efforts to combat and prevent pandemic fraud. The task force supports efforts to identify and prosecute the most guilty national and international criminal actors and assists authorities charged with managing fraud prevention aid programs by, among other things, expanding and integrating existing coordination mechanisms, identifying resources and techniques, to detect fraudulent actors and their systems; and to share and use information and intelligence gained from previous enforcement efforts.