DETROIT – Detroit resident Darrell Baker has been sentenced to 24 months in prison on bank fraud and money laundering charges resulting from the $ 590,000 Covid-19 coronavirus fraud, Acting US Attorney Saima Mohsin said.
The announcement was joined by Special Agent Timothy Waters in charge, the FBI and Inspector General Hannibal Mike Ware of the Inspector General’s Office for Small Business.
Darrell Baker, 56, pleaded guilty in September 2020 to one count of bank fraud in his attempt to obtain approximately $ 590,000 by defrauding a Pennsylvania financial institution into a Payroll Protection Program (PPP) loan. Baker also pleaded guilty to one count of money laundering as a result of financial transactions that he conducted with the funds obtained through fraudulent means.
“Mr. Baker treated the PPP like his personal bank account,” said Acting US Attorney Mohsin. “The actions of this defendant have led to the diversion of fixed assets destined for legitimate businesses affected by the COVID-19 pandemic for his personal benefit. We are committed to ensuring that anyone who uses the system is prosecuted. ”
“By illegally withdrawing money from the payroll protection program, Mr. Baker harmed the owners and employees of small businesses fighting the pandemic,” said Timothy Waters, FBI special agent in Detroit. “The FBI is committed to working with our law enforcement partners to investigate and prosecute anyone who uses the global pandemic to fill their pockets.”
In his plea of guilt, Baker confirmed his consent to apply for and receive a $ 590,000 PPP loan on behalf of the alleged business he owns called Motorcity Solar Energy, Inc.. PPP is a program run by the Small Business Administration (SBA) that provides loans to help businesses maintain their workforce during the pandemic. The SBA will forgive loans if all employees stay on pay for eight weeks and the money is used to pay wages, rent, mortgage interest, or utilities. PPP loans are financed by participating banks, in this case the Pennsylvania Client Bank.
Baker has submitted documents to his loan application confirming that Motorcity Solar Energy Inc. there were 68 employees, and in 2019, salaries, tips and other compensations totaling $ 2.8 million were paid. All of these beliefs were in fact false. Motor City Solar Energy had no employees, no payroll costs, and no operating business. Baker presented these false statements as part of a scheme to deliberately defraud bank customers.
Baker managed to withdraw approximately $ 172,000 from the $ 590,000 loan he received before Baker’s own financial institution froze the balance, which was eventually returned to the client’s bank. With the funds received, Baker bought four cashier’s checks, and with four checks bought two Cadillac Escalades, a Dodge Charger and a Hummer. Mr. Baker was ordered to confiscate these vehicles. Baker was also ordered to pay a monetary award of $ 172,484.40, which is part of the loan Baker received before his fraud was exposed and the balance of the loan was frozen, and to pay restitution in the amount of $ 89,864.
The case was led by Assistant US Attorney John C. Neal. The investigation was carried out jointly by the FBI and SBA-OIG.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Task Force to mobilize the resources of the Department of Justice, in partnership with government departments, to intensify efforts to combat and prevent pandemic-related fraud. The Task Force supports efforts to investigate and prosecute the most culpable domestic and international criminal actors, and helps agencies tasked with managing assistance programs to prevent fraud, inter alia, by expanding and incorporating existing coordination mechanisms, identifying resources and methods to identify fraudsters and fraudsters. schemes, and the exchange and use of information and ideas from previous compliance efforts. For more information on the Department’s response to the pandemic, visit https://www.justice.gov/coronavirus…
Anyone with information on allegations of attempted COVID-19 fraud can report it by calling the National Center for Disaster Management of Disaster Fraud (NCDF) of the U.S. Department of Justice at 866-720-5721 or filling out the NCDF complaint web form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form…