Five Charged in Connection with an over $4 Million Paycheck Protection Program Fraud Scheme
Five individuals were charged in an indictment with fraudulently obtaining more than $4 million in Paycheck Protection Program (PPP) loans and using those funds, in part, to purchase luxury vehicles. Authorities have seized a Range Rover worth approximately $125,000, jewelry, over $120,000 in cash, and over $3 million from 10 bank accounts at the time of arrest.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division; U.S. Attorney Byung J. “BJay” Pak of the Northern District of Georgia; Special Agent in Charge Chris Hacker of the FBI’s Atlanta Field Office; and Special Agent in Charge Kevin Kupperbusch of the Small Business Association Office of Inspector General (SBA OIG) Eastern Region made the announcement.
Darrell Thomas, 34 of Johns Creek, Georgia, Andre Lee Gaines 66 of Dallas, Georgia, Kahlil Gibran Green Sr., 46, of Cleveland, Ohio, and Bern Benoit, 44, of Burbank, California, were charged in an indictment filed in the Northern District of Georgia with conspiracy to commit bank and wire fraud, bank fraud, wire fraud, false statements to a financial institution and money laundering. Additionally, Carla Jackson, 52, of Tucker, Georgia was charged with money laundering. Thomas, Gaines, and Jackson were arrested this morning and appeared this afternoon before U.S. Magistrate Judge Russell G. Vineyard of the Northern District of Georgia.
The indictment alleges that Thomas, Gaines, Green, and Benoit submitted, or assisted in the submission of, PPP loan applications on behalf of five businesses – Bellator Phront Group Inc. (owned by Thomas), Gaines Reservation and Travel LLC (owned by Gaines), Impact Creations LLC (owned by Green), Transportation Management Services, Inc. (owned by Benoit), and Lee Operations LLC – seeking loans of approximately $800,000 for each company. Thomas, Gaines, Green, and Benoit caused to be submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ number of employees and payroll expenses. The financial institutions approved and funded over $4 million in loans.
The indictment further alleges that shortly after receiving the PPP funds, Thomas, Gaines, Green, and Benoit transferred the money to secondary bank accounts, including an account controlled by Jackson. After Jackson received the PPP funds, she further distributed the funds. Additionally, Thomas purchased a 2018 Mercedes-Benz S-Class S65AMG and a 2018 Land Rover Range Rover. In the days and weeks following the disbursement of PPP funds, the indictment alleges that Thomas, Gaines, Green, and Benoit did not make payroll payments as they claimed they would on their loan applications.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI and the SBA OIG. Trial Attorney Siji Moore of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Tal Chaiken and Nathan Kitchens of the Northern District of Georgia are prosecuting the case.
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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.