ATLANTA – Acting U.S. Attorney Kurt Erskine has released an update on his office’s efforts to combat fraud related to schemes targeting the Payroll Protection Program (PPP), a loan program created by Congress to help small businesses with payroll, mortgage interest. rent and utilities. during the COVID-19 pandemic.
“Together with our federal, state and local law enforcement partners, we remain focused on investigating and prosecuting PPP fraud crimes,” said Acting US Attorney Kurt R. Erskine. “Unfortunately, when criminals steal these funds, they take them out of the hands of those in financial difficulty. Criminals need to understand that taxpayer money leaks to help small businesses survive this crisis will be fully investigated and held accountable. ”
The U.S. Attorney’s Office in the Northern District of Georgia has indicted dozens of individuals for federal PPP fraud crimes, including bank fraud, conspiracy, and money laundering. Cases involve a variety of criminal behaviors, including business owners who inflated their payroll costs in order to obtain larger loans than they otherwise would have received, serial fraudsters who used shell companies to apply for loans, and organized crime networks that have submitted identical loan applications and supporting documents on behalf of more than one company. Most of the accused defendants not only received the funds from the loan under false pretenses, but also used the funds from the loan for prohibited purposes, such as buying houses, cars, jewelry and other luxury goods.
PPP fraud cases brought by the U.S. Attorney’s Office for the Northern District of Georgia include the following:
- United States v. Darrell Thomas et al .: Twenty-two defendants were charged with $ 11.1 million PPP loan fraud organized by Duluth, Georgia resident Darrell Thomas. Thomas and his team applied for fraudulent PPP loans on behalf of 14 businesses located in seven different states. Each loan application claimed the businesses had 59 to 69 employees, and included fake IRS tax forms and either a fake bank statement or payroll expense table, many of which were essentially identical in multiple fake applications. In fact, none of the businesses had employees or payroll costs. After funds from the PPP loan were transferred to business accounts, business owners transferred more than $ 5.5 million to Thomas-controlled accounts, and the funds were used to buy luxury cars, jewelry and other personal expenses. An investigation in the United States seized about $ 4 million in PPP funds, and six participants in the scheme, including Thomas, pleaded guilty.
- USA vs. Roderick Yarmaine Thompson et al .: Nine people, including ringleader Roderick Jarmaine Thompson, have pleaded guilty to various federal charges stemming from multiple bank fraud plots to obtain PPP loans under false pretenses. Each loan application contained identical false information. For example, each loan application falsely claimed that the company had 16 employees and had a monthly salary of $ 120,000. Each claim was corroborated by fake quarterly tax returns, which claimed the business owner was paying $ 358,819 in wages per quarter. In a statement, the business owner vowed that the loan proceeds will be used to pay salaries, utilities and rent in accordance with PPP rules. The business owners agreed to repay Thompson up to 50 percent of the loan as payment for helping him get the loan. After receiving the loans, the business owners wrote several checks for $ 8,333.33 to individuals of Thompson’s choice or to their friends and family. All checks were supposedly for “payroll”, even though the recipients of the checks did not work in the factories.
- USA v. Alicia Quarterman et al .: The U.S. Postal Inspection Service and the Drug Enforcement Administration have executed a search warrant at Alicia Quarterman’s home in Fayetteville, Georgia, in connection with an ongoing drug investigation. A bag containing methamphetamine, hidden in containers of dog food, was sent to Quarterman’s home. During the search, law enforcement authorities seized Quarterman’s cell phones and found a handwritten ledger containing the personal and banking information of several individuals. This ledger and subsequent searches on Quarterman’s cell phone uncovered alleged Economic Injury Loans (EIDL) and a PPP loan fraud scheme developed by Quarterman and Katrina Lawson of Houston, Texas, a former deputy sheriff of Fulton County. The scheme involved filing fraudulent business loan applications on behalf of their friends and relatives, who did not actually own the business. A total of 50 different individuals participated in the scheme, including India Middleton of Akkokik, Maryland (deputy sheriff in Arlington County, Virginia); James McFarland, Tranesha Quarterman (former military police officer), Darryl Washington, Adarin Jones and Katie Quarterman from Atlanta, Georgia; Nikia Wakefield of Rockville, Maryland; and Victor Montgomery from Washington DC. On March 16, 2021, ten defendants were charged with electronic fraud, bank fraud, mail fraud, money laundering and conspiracy to commit electronic communications fraud for attempting to steal more than $ 774,000. The defendants used the proceeds of the loan to purchase luxury cars, a motorcycle and an all-terrain vehicle.
- USA vs. Maurice Fein: Maurice Fane, who starred in the reality show Love and Hip Hop: Atlanta, pleaded guilty to banking fraud and falsified reporting to a financial institution in connection with a fraudulent application for a $ 3.7 million PPP loan. Fein falsely claimed that his trucking business employs 107 people and has an average monthly wage of $ 1,490,200. Fine said the funds from the PPP loan will be used to “retain workers and maintain wages or mortgage interest, rent and utility bills, as outlined in the Payroll Protection Program Rule.” Instead, Fein used the proceeds from the PPP loan to pay his overdue child support, pay back his previous fraud case, make payments to partners who helped him launch the Ponzi scheme, start a new business, buy jewelry, and rent Rolls. -Royce. In addition, Fein pleaded guilty to electronic communications fraud and conspiracy in connection with the Ponzi scheme, which resulted in about 20 people investing more than $ 5 million in Fein’s fictitious trucking business. Fein promised that he would use the investors’ money to run the business. Instead, Fein used investors’ money to pay his personal debts and expenses, and to fund his extravagant lifestyle.
The charges and other criminal charges mentioned above are simply charges and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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…
For more information, please contact the U.S. Attorney’s Office of Public Affairs at: USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address of the U.S. Attorney’s Office in the Northern District of Georgia is: http://www.justice.gov/usao-ndga…