Richland and Spokane, Washington – Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced today convictions for three more individuals that fraudulently obtained COVID relief funding intended for struggling businesses. These three convictions are the most recent obtained by the Eastern Washington COVID-19 Fraud Strike Force, which U.S. Attorney Waldref launched earlier this year.
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act provided a number of programs through which eligible small businesses could request and obtain relief funding intended to mitigate the economic impacts of the pandemic for small and local businesses. One such program, the Paycheck Protection Program (PPP), provided forgivable loans to eligible small businesses to retain jobs and maintain payroll during the pandemic.
“COVID-19 relief programs quickly ran out of money due to the number of businesses that requested funding, meaning that struggling, deserving small businesses were not able to obtain critically needed funding to keep their businesses afloat during the shutdowns and disruptions caused by the COVID pandemic,” said U.S. Attorney Waldref. “We created the Eastern Washington COVID-19 Fraud Strike Force because it is critical to the strength and safety of our communities that we all work together to combat pandemic-related fraud and bring much-needed accountability to these programs. The Strike Force works to ensure that limited resources are used to protect our local small businesses and the critical jobs and services that they provide for the community.”
In February 2022, U.S. Attorney Waldref and the U.S. Attorney’s Office began working with federal law enforcement agencies to create and launch a COVID-19 Fraud Strike Force that would leverage partnerships between different agencies to aggressively investigate and prosecute fraud against COVID-19 relief programs in Eastern Washington. The Strike Force consists of agency representatives from the U.S. Attorney’s Office, Small Business Administration (SBA) Office of Inspector General (OIG), Federal Bureau of Investigation (FBI), U.S. Department of the Treasury Inspector General for Tax Administration (TIGTA), U.S. Secret Service, U.S.
Homeland Security Investigations (HSI), U.S. Department of Veterans Affairs OIG, General Services Administration OIG, Internal Revenue Service, Department of Energy OIG, Department of Homeland Security (DHS) OIG, Department of Labor OIG, and others. Cases investigated and prosecuted by the Strike Force have resulted in numerous indictments and convictions, and have recovered millions of dollars in penalties and restitution for the public.
According to court documents and information disclosed during court proceedings, Jimia Rae Cain, age 52, of West Richland, Washington, obtained $337,267 in COVID relief funding in 2020 for her purported business, Americore Construction. In fact, as Cain admitted, Americore Construction did not have any legitimate business, employees, or payroll during the relevant time period, and Cain instead submitted false and fraudulent tax, payroll, and other documentation to obtain the funding. Cain also misrepresented her criminal history by certifying that she had no criminal convictions other than traffic citations, when in fact she had at least two prior fraud convictions. United States District Judge Mary K. Dimke accepted Cain’s guilty plea and set sentencing for June 1, 2023 at 1:30 p.m., in Richland, Washington.
According to court documents and information disclosed during court proceedings, Stephen Murphy, age 42, and Stephanie Murphy, age 37, both of Davenport, Washington, schemed together in 2021 to submit three fraudulent PPP applications for their purported businesses, obtaining more than $60,000 in COVID relief funding by submitting false information and false tax documentation on three separate occasions, including by falsely representing that their purported business had annual income of more than $100,000 prior to the pandemic. United States District Judge Thomas O. Rice accepted the Murphys’ guilty pleas, and set sentencing for February 22, 2023, at 9 a.m., in Spokane, Washington.
“I commend the stellar investigative work on these cases performed by the Strike Force and especially in this case by SBA OIG, TIGTA, and DHS OIG,” said U.S. Attorney Waldref. “We will continue to work with our law enforcement partners to strengthen our communities by protecting our small and local businesses.”
“Conspiring to defraud SBA robs the nation of vital resources intended to support the nation’s small businesses,” said SBA OIG’s Western Region Special Agent in Charge Wes King. “OIG remains committed to rooting out bad actors and protecting the integrity of SBA programs every day. I am continually grateful to the U.S. Attorney’s Office for its leadership and dedication to shining a light on darkness wherever it may be.”
“DHS OIG appreciates our partnership with the Eastern District of Washington’s COVID Fraud Strike Force. Today’s indictment sends a clear message that we will continue to investigate and help prosecute these kinds of fraud schemes,” stated Dr. Joseph V. Cuffari, DHS Inspector General.
“The Treasury Inspector General for Tax Administration aggressively pursues those who attempt to abuse the Coronavirus Aid, Relief, and Economic Security Act and its Paycheck Protection Program, which was created to assist legitimate business owners during the pandemic,” said J. Russell George, the Treasury Inspector General for Tax Administration. “We appreciate the efforts of our law enforcement partners and the United States Attorney’s Office to ensure this criminal activity is held to account.”
The charges to which Cain and the Murphys pled carry a maximum sentence of up to 5 years in federal prison. The cases were investigated by the Eastern Washington COVID Fraud Strike Force, and in particular by the Small Business Administration OIG, the Treasury Inspector General for Tax Administration, and the Department of Homeland Security OIG. U.S. Attorney Waldref also praised and thanked the FBI’s Spokane Resident Agency for providing critical support. Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene are prosecuting these cases on behalf of the United States.
Case Nos. 4:22-CR-06042-MKD, United States v. Cain
2:22-CR-00084-TOR, United States v. Murphy
Assistant United States Attorney and Public Affairs Officer
509-835-6311 or firstname.lastname@example.org