Category: USDJ National Center for Disaster Fraud

Source: United States Department of Justice (National Center for Disaster Fraud)

ALEXANDRIA, Va. – A McLean man pleaded guilty today to defrauding the Small Business Administration by fraudulently obtaining approximately $455,000 in Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loan (EIDL) funds.

According to court documents, Mehdi Pazouki, 65, was the owner and sole employee of Systems Integration Services Inc., an IT consulting company that Pazouki ran from his home in McLean. Between August 2020 and August 2021, Pazouki applied for and received approximately $455,000 in PPP loans and EIDL funds, which he falsely certified would be used for business-related purposes, but which he actually intended to, and did, use to fund his gambling at area casinos, pay down personal debt, and purchase real estate.

Within days of receiving his first EIDL disbursement, Pazouki spent over $27,000 in EIDL money at Hollywood Casino in Charles Town, West Virginia. Pazouki also used the PPP and EIDL money for down payments on two different real estate properties, to pay off his personal credit card debt, and to fund his personal investment account. Pazouki also falsely represented to the SBA in loan forgiveness applications that the PPP money had been used for legitimate business expenses, which resulted in the complete discharge of the loans.

Pazouki is scheduled to be sentenced on May 24. He faces a maximum penalty of 20 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; David J. Scott, Special Agent in Charge of the FBI Washington Field Office Criminal Division; and Duane E. Townsend, Special Agent in Charge of the U.S. Department of Commerce, Office of Inspector General, made the announcement after Senior U.S. District Judge Claude M. Hilton accepted the plea.

Assistant U.S. Attorney Lauren Halper is prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:24-cr-29.

Source: United States Department of Justice (National Center for Disaster Fraud)

MIAMI – On Feb. 8, Gregory Scott Keough, 57, of Wellington, Florida, was sentenced to 30 months in prison for submitting fraudulent loan applications seeking approximately $2 million in forgivable Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans. These loans are guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  

From March 2020 to Aug. 2020, Keough and conspirator Derek Acree, an attorney, submitted one fraudulent EIDL application and three fraudulent PPP loan applications on behalf of entities they both controlled. Of the funded loans, Keough was responsible for approximately $1,612,222. Keough individually submitted four additional false loan applications on behalf of companies he controlled as the Chief Executive Officer (CEO). Two of those applications were funded and Keough received $309,555 in CARES Act proceeds. These companies included National Financial Holdings Inc., NFH Florida LLC, DBA Finova Financial LLC, NFH Partners LLC, Grupo Keough LLC, Enclave Partners LLC, and National Financial Holding Technology LLC. The loans misrepresented the number of employees, payroll expenses, and gross revenues.

After obtaining the fraudulent loan proceeds, Keough transferred some of it to other bank account, paid multiple credit cards, as well as used to purchase and install storm windows for his home, private jet travel, and private school tuition.

Keough had entered a guilty plea to two counts of wire fraud and one count of money laundering in Nov. 2023. In addition to prison, Keough was ordered to pay $1,922,355 million in restitution.     

Acree was charged separately and pled guilty to conspiracy to commit wire fraud in Oct. 2022 (Case No. 22-cr-80157). Acree was sentenced, in Jan. 2023, to 41 months in prison and ordered to pay $1,262,600 million in restitution. 

Restitution was paid in full jointly by both Acree and Keough. 

U.S. Attorney Markenzy Lapointe for the Southern District of Florida and Special Agent in Charge Jeffrey B. Veltri of FBI, Miami Field Office, made the announcement. 

FBI West Palm Beach investigated the case.  The Office of State Attorney Dave Aronberg for the 15^th Judicial Circuit – Palm Beach County and the Palm Beach County Sheriff’s Office PPP Fraud Task Force provided invaluable assistance.  Assistant U.S. Attorney Robin W. Waugh prosecuted it and Assistant U.S. Attorney Joshua Pastor handled asset forfeiture.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

On September 15, 2022, the Attorney General selected the Southern District of Florida’s U.S. Attorney’s Office to head one of three national COVID-19 Fraud Strike Force Teams. The Department of Justice established the Strike Force to enhance existing efforts to combat and prevent COVID-19 related financial fraud. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov under case number 23-cr-80154.

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Source: United States Department of Justice (National Center for Disaster Fraud)

MIAMI – On Feb. 8, a Florida man admitted his role in a multimillion-dollar durable medical equipment (DME) kickback scheme, after previously pleading guilty to carrying out a COVID-19 fraud scheme and being a felon in possession of firearms and ammunition.

Kareem Memon, 34, of Coral Springs, Florida, pleaded guilty, before U.S. District Judge Raag Singhal in the Southern District of Florida, to an information charging him with one count of conspiracy to commit health care fraud and one count of conspiracy to violate the federal Anti-Kickback Statute (Case No. 24-cr-60004).

According to documents filed in the health care fraud case and statements made in court, Memon and his conspirators owned and operated marketing call centers and telemedicine companies through which they obtained doctors’ orders for DME for Medicare beneficiaries without regard to medical necessity. Memon and his conspirators provided doctors’ orders in exchange for bribes from DME companies that provided the braces to Medicare beneficiaries.  Memon and his conspirators caused losses to Medicare in excess of $11 million.

On Sept. 21, 2023, Memon pled guilty to wire fraud, money laundering, and felon in possession charges in a separate case before Judge Singhal (Case No. 23-cr-80068).  According to documents in the wire fraud case and statements made in court, Memon submitted fraudulent loan applications seeking more than $451,000 in forgivable Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and used those funds for personal gains.  Moreover, at the time of Memon’s arrest he was a convicted felon and illegally possessed 12 firearms and ammunition.

Memon is scheduled to be sentenced in the two cases on March 26, 2024. The health care fraud conspiracy charge is punishable by a maximum of 10 years in prison and the kickback conspiracy charge is punishable by a maximum of five years in prison. The wire fraud charge is punishable by a maximum of 20 years in prison, the money laundering charge is punishable by a maximum of 10 years in prison, and the felon in possession charge is punishable by a maximum of 15 years in prison. The charges are also punishable by a fine.

U.S. Attorney Markenzy Lapointe for the Southern District of Florida; Attorney for the United States Vikas Khanna for the District of New Jersey (for the health care fraud matter); Special Agent in Charge Jeffrey B. Veltri of the FBI, Miami Field Office; and Special Agent in Charge James E. Dennehy of the FBI, Newark Field Office, made the announcement.

FBI West Palm Beach and Newark Field Offices investigated the cases. Invaluable assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); U.S. Department of Health and Human Services-Office of Inspector General; U.S. Department of Defense Office of Inspector General, Defense Criminal Investigative Service; and U.S. Department of Veterans Affairs Office of Inspector General.

Assistant U.S. Attorneys Robin W. Waugh for the Southern District of Florida and Matthew Specht for the District of New Jersey are prosecuting these cases. Assistant U.S. Attorney Joshua Pastor for the Southern District of Florida is handling asset forfeiture.

In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case numbers 23-cr-80068 and 24-cr-60004.

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Source: United States Department of Justice (National Center for Disaster Fraud)

NEWPORT NEWS, Va. – A New York man was sentenced yesterday to 42 months in prison for his role in a fraudulent scheme to obtain pandemic benefits using the stolen identities of at least 20 other people.

According to court documents, Obinna Nwafor, 50, engaged in a scheme to obtain various pandemic loans using the identities of others who were unaware of this activity. In September 2020, L.H., a resident of Norfolk who also serves as a judge on the Norfolk Juvenile and Domestic Relations District Court, received a statement from the U.S. Small Business Administration (SBA) at her home address, indicating that she owed a payment on a loan received under the Economic Injury Disaster Loan Program (EIDL). L.H. reported this information to law enforcement, which led to the investigation in this case.

Further investigation revealed that an application for an EIDL loan in the amount of $150,000 had been submitted to the SBA in August 2020, using L.H.’s name and other confidential personal identifiers, including her Social Security number, date of birth, address, and phone number. Loan documents were electronically signed in L.H.’s name, and loan proceeds in the amount of $149,900 were disbursed to an account that did not belong to L.H and was controlled by Nwafor.

After this information came to light, further investigation revealed several related EIDL loans fraudulently obtained by Nwafor, including a $150,000 loan obtained in Virginia resident K.G.’s name. Like L.H., K.G.’s Social Security number, date of birth, address, and phone number had been used on the loan application. Similarly, K.G. had not applied for an EIDL loan or authorized anyone to apply for a loan on her behalf. Within days of the loan proceeds disbursement, Nwafor moved the funds to other accounts he controlled, including an account held jointly with his spouse, a bank account held in the name of a Nigerian entity in which Nwafor held an interest, and nearly $75,000 to an account belonging to a romance fraud victim, who had been misled as to the origin of the funds.

Further investigation also revealed that Nwafor had received approximately $300,000 in pandemic-related unemployment benefits in the names of at least eighteen other people. Those funds had been deposited into approximately six different bank accounts owned and controlled by Nwafor. When Nwafor was told by Wells Fargo that these funds were being returned to the originating state unemployment offices, Nwafor frantically worked with other individuals in an attempt to convince the bank not to return the funds.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Jason S. Miyares, Attorney General of Virginia; Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office; and Damon E. Wood, Inspector in Charge for the U.S. Postal Inspection Service – Washington Division, made the announcement after sentencing by U.S. District Judge Roderick C. Young.

Special Assistant U.S. Attorney Alyson C. Yates and Assistant U.S. Attorney Brian J. Samuels prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:23-cr-21.

Source: United States Department of Justice (National Center for Disaster Fraud)

MIAMI – On Feb. 5, a Miami woman was sentenced to 70 months in federal prison for money laundering of nearly $2 million in fraudulent COVID-19 relief loans, after previously pleading guilty in October 2023.

From April 2020 through April 2021, Maritza Morales Hermoso, 58, of Miami, Florida, and others, including co-defendant Javier Lazo Cabrera, conspired to defraud private lenders and the Small Business Administration (SBA) by filing false and fraudulent loan applications for multiple companies under both the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program, despite that several of those companies had no payroll and were not actively doing business at the time the loan applications were submitted. The applications were supported by fabricated payroll documents and inflated employee numbers. As a result of these false and fraudulent applications, a California-based SBA-approved PPP lender disbursed close to $2 million in fraudulent loan proceeds to bank accounts controlled by Hermoso.

Hermoso spent the proceeds from the fraudulent PPP and EIDL loans on gambling at South Florida casinos and various other personal expenses like cosmetic surgery, a Cadillac Escalade, and a Pomeranian puppy. Hermoso also disguised her misuse of funds by laundering the loan proceeds through multiple unrelated business accounts and withdrawing the money in cash. 

Hermoso’s co-defendant, Cabrera, pleaded guilty to conspiracy to commit wire fraud in December 2023. Cabrera’s sentencing is scheduled for March 11 at 8:30 a.m. in Miami. Cabrera faces up to 20 years in federal prison.

U.S. Attorney Markenzy Lapointe for the Southern District of Florida, Special Agent in Charge Rafael Barros of the U.S. Secret Service (USSS), Miami Field Office, SBA OIG’s Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite, U.S. Small Business Administration Office of Inspector General (SBA OIG), Investigations Division’s Eastern Region, and Special Agent in Charge Jeffrey B. Veltri of FBI, Miami Field Office announced the sentence.

USSS Miami, SBA OIG, Investigations Division’s Eastern Region, and FBI Miami investigated the case. Assistant U.S. Attorneys Joseph Egozi and Roger Cruz prosecuted the case. Assistant U.S. Attorneys Mitchell Evan Hyman is handling asset forfeiture.

In March 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted. It was designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. Among other sources of relief, the CARES Act authorized and provided funding to the SBA to provide Economic Injury Disaster Loans (“EIDLs”) to eligible small businesses, including sole proprietorships and independent contractors, experiencing substantial financial disruptions due to the COVID-19 pandemic to allow them to meet financial obligations and operating expenses that could otherwise have been met had the disaster not occurred.  EIDL applications were submitted directly to the SBA via the SBA’s on-line application website, and the applications were processed and the loans funded for qualifying applicants directly by the SBA.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

On September 15, 2022, the Attorney General selected the Southern District of Florida’s U.S. Attorney’s Office to head one of three national COVID-19 Fraud Strike Force Teams. The Department of Justice established the Strike Force to enhance existing efforts to combat and prevent COVID-19 related financial fraud. For more information on the department’s response to the pandemic, please click here. 

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-20360.

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Source: United States Department of Justice (National Center for Disaster Fraud)

SAN JUAN, Puerto Rico – W. Stephen Muldrow, U.S. Attorney for the District of Puerto Rico, announced the indictment of 19 individuals for their participation in a scheme to illegally obtain federal recovery funds under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Grand Jury charged the defendants with multiple counts of wire fraud and money laundering.

The charging documents allege that from April 2020 through February 2024, the defendants and their co-conspirators caused the submission of at least 30 Paycheck Protection Program (PPP) loan applications seeking the illegal disbursement of at least $587,442 in federal recovery funds from the U.S. Small Business Administration (SBA) and Bank 1.

“This is the fifth round of defendants charged since April 2023 relating to this fraud scheme. The investigation remains ongoing, and we expect more charges,” said U.S. Attorney Muldrow. “Today I make the same recommendation that I have in the past – if you are involved in criminal activity, contact law enforcement and cooperate. It will be better for you if you come forward than if you wait for the feds to knock on your door.”

“In IRS Criminal Investigation we have been working on these complex cases for almost three years. The investigations include multiple special agents and expert personnel from several federal agencies,” said Matthew D. Line, Special Agent in Charge of the IRS-CI Office in Miami. “Twenty-four IRS:CI special agents coordinated today’s operation were responsible for the arrest of five people this morning. Our message is one and it is clear: we will continue to work tirelessly to bring to justice those who commit criminal acts or defraud our taxpayers, no matter who they are or where they are.”

“Scheming to fraudulently obtain federal funds that are meant to provide assistance to the nation’s small businesses is unacceptable,” said SBA OIG’s Eastern Region Special Agent in Charge Amaleka McCall-Braithwaite. “OIG will aggressively root out organized fraud rings that seek to wrongfully take advantage of pandemic relief program funds. Today’s arrests serve as a reminder that each fraudulent action is like footprints in concrete, and wrongdoers will be brought to justice. I want to thank the U.S. Attorney’s office and our law enforcement partners for their support and dedication to pursuing justice in this case.”

The United States Secret Service, the Small Business Administration Office of the Inspector General, the Treasury Inspector General for Tax Administration, and the Internal Revenue Service Criminal Investigations conducted the investigation with the collaboration of the Puerto Rico Treasury Department, the Puerto Rico Bureau of Special Investigations, the Puerto Rico Police Bureau, and the Guaynabo Municipal Police.

According to court documents, defendants José Carmona Morales, a.k.a. “Cheka” and Cecy Casiano Santiago, together with Manfred A. Pentzke Lemus, a.k.a. “Man/Contable/El Gestor”, Rodolpho R. Pagesy Roussel, a.k.a. “El Banquero”, Augusto A. Lemus Berrios, a.k.a. “Primo”, Jonatan Ben David Prieto Ruiz De Val, a.k.a. “Johnny Millones”, Ligia María Lemus De Pentzke, and others knowingly devised a scheme to defraud the SBA and Bank 1 to obtain federal money and property by means of materially false and fraudulent pretenses, representations, and promises submitted through applications for EIDL and PPP loans made available through the CARES Act to help small businesses recover from the impact of the pandemic. Pentzke Lemus, Pagesy Roussel, Lemus Berrios, Prieto Ruiz De Val, and Lemus De Pentzke were previously charged in April 2023 in a separate indictment.

The defendants are:

[1] José Carmona Morales, a.k.a. “Cheka”

[2] Cecy Casiano Santiago

[3] Arnaldo Dávila Rivera

[4] Cruz Sheila Pérez Guzmán

[5] Emmanuel Maysonet Cruz

[6] Janelle Irene Fe Cooney Delgado

[7] Jesús Rodríguez Maysonet

[8] Julia Cecilia Santiago Salgado

[9] Nelson Noriega Sotomayor

[10] Héctor Martínez Ortiz

[11] Carolyn González Marrero

[12] Edyel León Rivera

[13] Ángel Febus Muñoz

[14] Verónica Vázquez Molina

[15] Karishna Ayala Otero

[16] Lilliam Collazo Pérez

[17] Rebecca Serrano Martínez

[18] Rosa Casanova Salgado

[19] Tatiana Lebrón

The CARES Act authorized federal assistance through the issuance of SBA loans to small businesses and non-profit entities that experienced revenue loss due to the COVID-19 worldwide pandemic. The EIDL program was one such loan assistance program for small businesses. To procure the loan, applicants had to fill out an online application detailing operational information for the 12‑month period prior to the COVID-19 pandemic, such as the number of employees in the business, the gross business revenues realized, and the cost of goods sold. Another form of assistance provided by the CARES Act was the authorization of United States taxpayer funds in forgivable loans to small businesses for job retention and certain other expenses, such as interest on mortgages, rent and utilities, through the Paycheck Protection Program (PPP).

The indictment alleges that the defendants submitted at least 30 fraudulent PPP loan applications containing materially false and fraudulent information and false documents, including false and fictitious tax documents, payroll records, bank records, and identification documents, to procure the disbursement of PPP assistance loans by Bank 1. The indictment further alleges that the defendants and their co-conspirators directed the recipients of the fraudulently obtained PPP loans to remit a portion of the proceeds of the loans to the defendants and their co-conspirators and used the loan proceeds to benefit themselves and others, and to pay for expenses prohibited under the requirements of the PPP programs.

Defendants José Carmona Morales, a.k.a. “Cheka” and Cecy Casiano Santiago are facing one count of conspiracy to commit money laundering, for knowingly conducting financial transactions involving the proceeds of wire fraud, together with other individuals previously indicted. The defendants, including José Carmona Morales, a.k.a. “Cheka”, are also alleged to have recruited other unindicted co-conspirators to not only obtain additional EIDL and PPP loans under false pretenses, but recruit others to submit fraudulent applications. 

If convicted, the defendants are facing up to 30 years in prison for the wire fraud counts. José Carmona Morales, a.k.a. “Cheka” and Cecy Casiano Santiago are also facing up to 20 years of imprisonment for the money laundering count.

Assistant U.S. Attorney (AUSA) Timothy R. Henwood, Chief of the Criminal Division, and AUSA Daniel J. Olinghouse are in charge of the prosecution of the case. 

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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Source: United States Department of Justice (National Center for Disaster Fraud)

MIAMI – On Jan. 5, a former Broward Sheriff’s Office (BSO) Department of Detention lieutenant was charged with two counts of wire fraud for allegedly fraudulently obtaining a total of $167,750 in forgivable Paycheck Protection Program (PPP) loans.

On April 1, 2021, Ernest Bernard Gonder Jr., 41, of Port St. Lucie, Florida, allegedly submitted a false and fraudulent PPP loan application misrepresenting EBG Properties LLC’s average monthly payroll and number of employees, according to the allegations in the information. In support of this application, Gonder also allegedly submitted multiple fraudulent IRS Forms 941. As a result of this false and fraudulent application, a New Jersey-based Small Business Administration (SBA)-approved PPP lender disbursed $106,540 to a bank account controlled by Gonder in the name of EBG Properties.

The information also alleges that on April 6, 2021, Gonder submitted a second false and fraudulent PPP loan application misrepresenting The Impact Center of Broward County Inc’s average monthly payroll and number of employees. In support of this application, Gonder also allegedly submitted multiple fraudulent IRS Forms 941. As a result of this false and fraudulent application, the New Jersey-based SBA-approved PPP lender disbursed $61,210 to a bank account controlled by Gonder in the name of The Impact Center of Broward County.

The information further alleges that Gonder used the proceeds of the scheme to enrich himself. Gonder also sought and received forgiveness of the two PPP loans he received, as alleged in the information.

On Jan. 30, Gonder made his initial appearance in federal court in Fort Lauderdale, Florida. If convicted, Gonder faces up to 20 years in prison on each count.

U.S. Attorney Markenzy Lapointe for the Southern District of Florida, Special Agent in Charge Jeffrey B. Veltri of FBI, Miami Field Office, Special Agent in Charge Brian Tucker of the Eastern Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (FRB-CFPB), and Sheriff Gregory Tony of the Broward Sheriff’s Office (BSO), made the announcement.

FBI Miami, FRB-CFPB Office of Inspector General and BSO investigated the case. Assistant U.S. Attorney Marc Anton is prosecuting it. Assistant U.S. Attorney Sara Klco is handling asset forfeiture.

These charges stem from the Department of Justice’s ongoing initiative to prosecute fraud in connection with COVID-19 pandemic relief programs that offered assistance under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, including the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, as well as other crimes relating to the pandemic.

An information contains mere allegations and defendants are presumed innocent unless and until proven guilty in a court of law. 

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 24-cr-60003.

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Source: United States Department of Justice (National Center for Disaster Fraud)

WILMINGTON, Del. – David C. Weiss, U.S. Attorney for the District of Delaware announced today that a Bear, DE man pleaded guilty to bank fraud in connection with obtaining a Payroll Protection Plan (“PPP”) loan.

According to court documents, Michael Coleman, 43, a former Sergeant with the Wilmington Police Department, pled guilty to fraudulently obtaining a $150,000 PPP loan from the Small Business Administration in 2021 for a personal business he purportedly operated.  The Small Business Administration funded loans to small businesses as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

U.S. Attorney Weiss stated, “Mr. Coleman was a public servant who took federal funds from a public program that was meant to provide financial support to struggling businesses during a global pandemic when he did not qualify for those funds. My office, in partnership with our federal, state, and local law enforcement partners, will continue to identify and prosecute individuals who illegally obtained CARES Act funding.”

“These assistance programs may have ended, but our commitment to seeking out those who defrauded them has not,” said Acting Special Agent in Charge R. Joseph Rothrock of the FBI’S Baltimore Field Office. “The FBI and our partners remain focused on making sure stolen funds are returned to taxpayers, and individuals involved in this type of criminal behavior are held responsible for their actions.”

Coleman faces a maximum penalty of 30 years in prison. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

This case was investigated by the FBI Baltimore Field Office’s Wilmington Resident Agency with assistance from the Delaware Department of Justice and is being prosecuted by Assistant U.S. Attorney Alexander Ibrahim.

For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. Related court documents and information is located on the website of the District Court for the District of Delaware or on PACER by searching for Case No. 23-cr-083.

Source: United States Department of Justice (National Center for Disaster Fraud)

DUBLIN, GA:  A Georgia woman was sentenced to five years in prison and ordered to repay more than half a million dollars she fraudulently obtained from COVID-19 small business relief programs.

Gladys Harun, 44, of Byron, Ga., was sentenced to 60 months in prison after pleading guilty to lying to a federal investigator, said Jill E. Steinberg, U.S. Attorney for the Southern District of Georgia. U.S. District Court Judge Dudley H. Bowen also ordered Harun to pay $552,679 in restitution, and to serve three years of supervised release upon completion of her prison term. There is no parole in the federal system.

“Harun used her knowledge as a tax preparer to fraudulently obtain hundreds of thousands of dollars in funds intended for small businesses struggling financially during the COVID-19 pandemic,” said U.S. Attorney Steinberg. “Such greed-fueled theft from government programs hurts businesses legitimately in need of vital relief efforts.”

As described in court documents and proceedings, Harun was a franchisee of a tax preparation service with multiple locations in Georgia. She admitted to lying to investigators from the Small Business Administration Office of Inspector General about applications she filed for herself and on behalf of others, including her customers, to obtain more than $550,000 from a California lender through the Coronavirus Aid, Relief, and Economic Security Act’s Paycheck Protection Program and Economic Injury Disaster Loans.

“Schemers who stole taxpayer dollars from SBA ‘s Paycheck Protection Program will be brought to justice,” said SBA-OIG’s Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite. “This sentence demonstrates that those responsible will be held accountable. I want to thank the U.S. Attorney’s office and our law enforcement partners for their support and dedication to pursuing justice in this case.”

“This successful effort with our partner agencies is just one example of the Secret Service commitment to aggressively investigate fraud, especially cases that involve government programs designed to help businesses,” said Resident Agent in Charge J. Craig Reno of the U.S. Secret Service Savannah Resident Office. “The United States Secret Service, along with our state, local, and federal law enforcement partners, will continue to investigate, arrest, and support the successful prosecution of the criminals who choose to commit fraud in Georgia and across the nation.”

“Harun’s sentencing shows after the expiration of the PPP and EIDL programs more than two years ago, those who fraudulently obtained funds are still being held accountable,” said Maisha Horton, Acting Assistant Special Agent in Charge, IRS Criminal Investigation, Atlanta Field Office. “There are individuals who believe they’ve gotten away with stealing taxpayers funds through those programs; however, IRS Criminal Investigation and our law enforcement partners vigorously continue investigating suspects and forwarding our findings to the U.S. Attorney’s Office for adjudication.”

The case was investigated by the Small Business Administration Office of Inspector General, the U.S. Secret Service, and IRS Criminal Investigation, and prosecuted for the United States by Southern District of Georgia Assistant U.S. Attorney L. Alexander Hamner.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Source: United States Department of Justice (National Center for Disaster Fraud)

RALEIGH, N.C. – Two members of a New Bern family pled guilty for their role in a scheme to defraud a program designed to help struggling North Carolina residents stay in their homes during the COVID-19 pandemic. Takeeia Hawkins, age 43, and her daughter, Shanasia Hawkins, age 22, both pled guilty to conspiracy to commit mail fraud and face up to 30 years at sentencing later this year. Takeeia Hawkins’ son, Jmari Hawkins, age 24, and another conspirator, Jonell Ojeda, age 23, have also been indicted in the scheme to fraudulently obtain more than $850,000 in emergency rental assistance from the NC HOPE Program (North Carolina Housing Opportunities and Prevention of Evictions).

“This case is yet another example of the greedy taking from the needy,” said U.S. Attorney Michael Easley. “These funds were meant to help struggling families pay their rent, and these defendants stole it.  Our office will keep coming for fraudsters who used pandemic relief as a personal piggybank.”

According to information presented in court, Takeeia and Shanasia Hawkins admitted to submitting fraudulent applications to the NC HOPE Program, in which they falsely claimed to be the landlord of multiple properties in North Carolina.  More than 50 applications, requesting nearly $500,000, were submitted with Takeeia or Shanasia Hawkins listed as the landlord. Neither woman owned property nor served as a landlord of any property.  Based on the fraudulent representations, the NC HOPE Program mailed checks, totaling nearly $150,000 to the two women. 

Jmari Hawkins and Ojeda were indicted by a federal grand jury on charges of conspiracy to commit mail fraud and aggravated identity theft in October 2023.  According to the indictment, Jmari Hawkins and Ojeda are alleged to have worked together with other Hawkins family members to falsely claim to be property landlords on applications submitted to the NC HOPE Program.  Property records show neither Jmari Hawkins or Ojeda owned property or served as landlord of any property on the applications.  In addition, the indictment alleges they conspired with a third-party to obtain stolen identities and fraudulent identity cards to use when submitting applications for rental assistance.  Their cases are still pending, and an indictment is merely an accusation. The defendants are presumed innocent until proven guilty.   (see case number below)

The NC HOPE Program administered federal COVID-19 relief funds and provided emergency rental assistance to North Carolina renters who faced eviction and homelessness during the pandemic.  The Program allowed renters to submit an online application to apply for rental assistance.  If approved, the Program paid the tenant’s rent, in checks sent directly to the landlord, for up to 15 months of overdue or future rent payments. 

“Treasury OIG is committed to supporting these coordinated efforts to detect and prevent misuse of public funds,” said Acting Inspector General Rich Delmar.

This alleged scheme allowed the members of the Hawkins family and their associates to enrich themselves at the expense of North Carolina renters struggling with housing insecurity during the pandemic.

“Investigating allegations of fraud related to housing assistance programs is a critical part of the mission of the Office of Inspector General,” said Special Agent in Charge Jerome Winkle, with the U.S. Department of Housing and Urban Development, Office of Inspector General. “We will continue to work with our law enforcement partners to aggressively investigate these types of allegations and bring to justice bad actors who prey on communities struggling with the catastrophic impacts of the pandemic.”

“The COVID-19 pandemic was a difficult time for so many families, including those in communities across North Carolina,” said NC State Bureau of Investigation Director Robert Schurmeier. “The purpose of emergency relief funds like the NC HOPE Program offered was to provide a lifeline to those struggling to keep a roof over their heads. It is beyond disappointing to know that individuals exploited the crisis for their own personal gain while some of their most vulnerable neighbors risked losing their homes. Such actions undermine the very support systems created to hold our communities together during a crisis or otherwise.”

Michael Easley, U.S. Attorney for the Eastern District of North Carolina, made the announcement.  The United States Department of Housing and Urban Development, Office of Inspector General; the United States Department of Treasury, Office of Inspector General; and the North Carolina State Bureau of Investigation investigated the case and it is being prosecuted by Assistant U.S. Attorney Karen Haughton.

Related court documents and information are located on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for United States v. Takeeia Hawkins, Case No 5:23-CR-00380; United States v. Shanasia Hawkins, Case No. 5:23-CR-00379; Unites States v. Jmari Hawkins et al, Case No. 5:23-cr-00300.