York Tax Preparer Pleads Guilty To Bank Fraud For Submission Of Fraudulent PPP Loan Applications

HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Dommonick T. Chatman, age 50, pleaded guilty before United States District Judge Malachy E. Mannion to one count of bank fraud in connection with numerous fraudulent Paycheck Protection Program (PPP) loan applications that were filed, with his knowledge and approval, through his business, The Chatman Group, LLC.

According to United States Attorney Brian D. Miller, Chatman admitted that over the course of several months in 2021, he either participated in preparing, or approved of another employee’s preparation of, fraudulent PPP loan applications for almost twenty different individuals. The total amount of funds requested in connection with such loans exceeded $400,000, and the amount disbursed in response to such applications was approximately $341,438.82. Chatman agreed to pay restitution to the U.S. Government in the amount of $341,438.82 in connection with his guilty plea.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law that was enacted in March 2020 and designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID- 19 pandemic. One source of relief provided by the CARES Act was the authorization, through the PPP, of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses. As part of the program requirements, businesses had to use PPP loan proceeds for certain expenses, such as payroll costs, interest on mortgages, rent, utilities, and worker-protection expenditures related to COVID-19. The PPP allowed the interest and principal on the loan to be entirely forgiven if the business spent the loan proceeds on eligible expenses within a designated period of time and used a certain percentage of the PPP loan proceeds on payroll expenses.

To obtain a PPP loan, a qualifying small business was required to apply for it and provide information on its operations, including the number of employees and expenses. In addition, businesses generally had to provide supporting documentation.

Chatman admitted that numerous applications filed through his business were fraudulent because the applicants either did not have businesses that were in existence as of February 15, 2020, as required by the PPP rules, or did not have the income required to get a PPP loan for the amounts that they were requesting in their respective applications. Chatman admitted that he had prepared tax returns for a number of these applicants, as they were existing clients of The Chatman Group whom he knew personally. Chatman therefore knew that these clients’ applications were fraudulent.

Chatman also admitted that he received approximately 5% of each individual loan, or about $1,000, for each loan application that his company filed. When an employee assisted in the processing of these applications, Chatman shared the proceeds with this employee.

Finally, Chatman admitted to obstructing the government’s investigation by disposing of a handwritten list of the names of clients who had received PPP loan applications through his company.

The U.S. Attorney General previously 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. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus. 

The case was investigated by the Federal Bureau of Investigation and the U.S. Department of the Treasury, Office of Inspector General. Assistant U.S. Attorneys Ravi Romel Sharma and K. Wesley Mishoe are prosecuting the case. 

The maximum penalty under federal law for bank fraud is 30 years of imprisonment, a term of supervised release following imprisonment, and a fine.  A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

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