Baton Rouge Woman Sentenced to 48 Months in Federal Prison for Defrauding the PPP and EIDL Loan Programs and Laundering the Fraudulent Proceeds
United States Attorney Brandon J. Fremin announced that U.S. District Judge John W. deGravelles sentenced ADRIAN C. HAMMOND, JR., age 38, of Baton Rouge, Louisiana, to 12 months and one day in federal prison following his convictions for bank fraud, money laundering and obstructing the administration of Internal Revenue laws. The Court further sentenced HAMMOND to three years of supervised release following his term of imprisonment. HAMMOND was also ordered to pay $200,719.59 restitution to Red River Bank, $58,000 restitution to the Internal Revenue Service, and to forfeit an additional $213,656.12.
As the defendant admitted in connection with his guilty pleas, HAMMOND owned and/or operated a number of businesses, including 51/50 Productions, LLC and Affiliate Nation, LLC, through which he worked as a studio producer and event promoter, and Northgate Investments, LLC. In 2013, HAMMOND opened a new business, Best Boilers Seafood, LLC, which HAMMOND represented would operate a full-service seafood restaurant in Baton Rouge.
In connection with his efforts to open Best Boilers, however, HAMMOND knowingly executed a scheme to defraud a local bank. In February of 2013, HAMMOND caused Fidelity Bank of Baton Rouge, now known as Red River Bank, to approve two new business loans worth more than $300,000. After the new loans were in place, HAMMOND provided the bank with two invoices from a Baton Rouge restaurant supply company that appeared to reflect that HAMMOND had purchased approximately $132,000 of equipment. HAMMOND had not purchased the equipment reflected on the invoices, nor had he incurred the expenses reflected on the invoices, nor did he have any intention of doing so at the time he submitted the documents to the bank. Based on the false documents, the bank began disbursing loan proceeds to HAMMOND, including two cashier’s checks payable to the vendor having a value of approximately $132,978.
After gaining control of the funds, HAMMOND illegally laundered the proceeds. First, HAMMOND deposited the checks into a Regions Bank account in the name of a company with a name that was substantially similar to the vendor’s actual name. HAMMOND had previously caused an individual who lived in Georgia to open the account in Georgia pursuant to his instructions. HAMMOND then caused the majority of the funds that had been deposited into the Georgia account to be transferred to yet another Regions Bank account that HAMMOND controlled, from which HAMMOND withdrew much of the funds in cash. HAMMOND knew that the funds represented the proceeds of unlawful activity and intended to conceal and disguise the location and control of the money.
Meanwhile, from 2011 through 2016, HAMMOND had a significant unpaid tax liability with the Department of Treasury—Internal Revenue Service (“IRS”). Through a series of acts, he attempted to impede and obstruct the IRS in an effort to unjustly enrich himself, appear more credit-worthy to third parties than he actually was, and evade the IRS’s efforts to collect money owed by HAMMOND. For instance, in 2014, after the IRS filed a Notice of Tax Lien against HAMMOND for more than $110,000 in unpaid taxes, HAMMOND caused a fraudulent lien withdrawal to be filed with the 19th Judicial District Court for East Baton Rouge Parish. The fraudulent document purportedly withdrew the federal tax lien that had previously been filed against HAMMOND, even though HAMMOND knew that he had not paid his unpaid liability.
By early 2016, HAMMOND’s tax liability remained outstanding. The IRS issued a levy notice to Southern University and A&M College (“Southern”), which had entered into a contract with HAMMOND, through Affiliate Nation, to provide entertainment for an upcoming concert, at a cost of more than $220,000. When Southern advised HAMMOND that it intended to honor the levy and withhold some of the funds that Southern would otherwise have paid to HAMMOND, HAMMOND terminated the contract. HAMMOND then caused an acquaintance of his to obtain the same contract with Southern, and after his acquaintance began receiving funds from Southern, HAMMOND persuaded the acquaintance to route more than $60,000 of the funds to him, unbeknownst to Southern. HAMMOND deposited the funds into the bank account of another one of his businesses, Boil & Roux Kitchen, LLC, which allowed HAMMOND to gain control over funds that otherwise would have been used to meet his long-standing tax delinquency.
U.S. Attorney Fremin stated, “This case should serve as a strong reminder that we will work closely with our law enforcement partners to identify, investigate, and prosecute significant financial crimes affecting victims in our district. We will not be deterred by a defendant’s sophisticated attempts to avoid the law, such as this defendant’s elaborate scheme to launder some of thes fraudulent proceeds of his crimes and hide other income that was long overdue to the United States Treasury. I am especially appreciative of the dedicated, professional IRS employees who worked diligently, for years, to try to hold Mr. Hammond responsible for his years of unpaid bills and prompt him to comply with the same tax laws that the rest of us follow. The federal prison sentence that Mr. Hammond will serve in this case will hopefully deter him and others from similar criminal conduct in the future, and the restitution and forfeiture orders imposed by the court will help us provide recovery for the victims.”
TIGTA Special Agent in Charge Gary Smith stated, “It is the mission of the TIGTA to protect the integrity of the Internal Revenue Service and promote the fair administration of our Federal tax system. TIGTA continues to work closely with the United States Attorney’s Office and all of our law enforcement partners to hold individuals responsible for their attempts to interfere with our nation’s tax system for personal gain.”
The investigation was led by the U.S. Treasury Inspector General for Tax Administration (TIGTA) and the Federal Bureau of Investigation, which received valuable assistance from the Internal Revenue Service’s Examination and Collection Divisions. The case was prosecuted by Assistant United States Attorney Alan A. Stevens, who serves as Deputy Chief within the office’s Criminal Division.