Central Georgia Woman Found Guilty of Pandemic Loan Fraud Scheme

MACON, Ga. – A Milledgeville, Georgia, resident was found guilty of wire fraud conspiracy and money laundering in connection with a scheme to fraudulently obtain COVID-19 relief funds guaranteed by the U.S. Small Business Administration (SBA) through the Paycheck Protection Program (PPP), with most of the funds received used for luxury cars and personal expenses.

Rosalend Way, 40, of Milledgeville, was found guilty of one count of conspiracy to commit wire fraud and one count of money laundering on Sept. 24, following a three-day trial that began on Sept. 22. Way is facing a maximum of 20 years in prison and a $1,000,000 fine. Sentencing is scheduled for Dec. 2.

Codefendant, James Frank Austin, 51, of Americus, Georgia, pleaded guilty to one count of conspiracy to commit wire fraud, two counts of bank fraud and two counts of money laundering on Aug. 27. Austin is facing a maximum of 30 years in prison and a $1,000,000 fine. Austin is scheduled for sentencing on Nov. 19.

U.S. District Judge Marc Treadwell is presiding over the case. There is no parole in the federal system.

“Our office will pursue justice against those who exploited a taxpayer funded program created to sustain citizens during a national emergency,” stated U.S. Attorney William R. “Will” Keyes. “Our federal investigative and prosecutorial team is committed to holding these offenders accountable.”

“Way and Austin chose to commit fraud, further depleting funds designed to help people who struggled to survive during the pandemic,” said FBI Atlanta Special Agent in Charge Paul Brown.  “The FBI and our law enforcement partners will continue to pursue criminals who cheat federal health programs and profit at the expense of American taxpayers.”

“Defrauding the U.S. government is a serious offense which can bring lifelong consequences to individuals who commit the crime,” said Special Agent in Charge Demetrius Hardeman, IRS Criminal Investigation, Atlanta Field Office. “Taxpayers expect their hard-earned dollars to fund the programs and policies enacted by the government. IRS Criminal Investigation special agents and our law enforcement partners will hold those accountable who exploit and defraud government programs for their own benefit.”

According to court documents and evidence submitted at trial, on June 21, 2020, Way and Austin applied for a PPP loan on behalf of Propel Opportunity Fund, a business established to raise capital through investors and use the funds to conduct pre-development work in underserved neighborhoods, preparing them for future development. The PPP loan application indicated that Propel had 18 employees with an average monthly payroll of $420,558, and they needed the funds to make payroll, as well as to pay their mortgage interest and utilities. They also submitted a fraudulent W-3 that indicated Propel paid $4,999,789 in wages in 2019. Way claimed 100% ownership of Propel on the PPP loan application.

IRS records from Propel’s 2019 corporate tax return showed that the company did not pay any salaries or wages, nor did Propel’s bank statements reflect payroll as suggested in the PPP application. The loan was approved and Propel received $1,051,395. Approximately $500,000 ended up in bank account’s belonging to Way and was spent on personal items including dining, retail, gas, groceries and cash withdrawals. Additionally, Austin used approximately $30,000 in funds from another fraudulently obtained PPP loan to pay off Way’s Mercedez-Benz.

Austin submitted a fraudulent PPP loan application on May 9, 2020, on behalf of the Austin Smith Center for Community Development (ASCCD). As a result of this fraudulent application, ASCCD was awarded a $654,315.00 PPP loan. Austin also obtained another fraudulent PPP loan for Propel and received $372,500 on March 15, 2021. Instead of these funds being spent for authorized expenditures under the PPP program, Austin used the money for personal expenses, including $119,840 on a Bentley. Austin obtained a total of $2,078,210 in fraudulent PPP loans.

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

The FBI and the IRS investigated the case.

Assistant U.S. Attorneys Elizabeth Howard and Hannah Couch are prosecuting the case for the Government.