Morgan County Woman Sentenced to Six Months in Prison

HUNTSVILLE, Ala. – A Morgan County woman has been sentenced for making false statements to fraudulently obtain a Paycheck Protection Program (PPP) loan through the Small Business Administration (SBA), announced U.S. Attorney Phillip W. Williams Jr. 

U.S. District Court Judge Liles C. Burke sentenced Sylvia Lynn Pitts also known as “Scylvia L. Pitts”, 49, of Decatur, Alabama, to six months in prison. Pitts pleaded guilty to making false statements. 

According to the plea agreement, on July 10, 2020, Pitts applied for a PPP loan through a bank located in Decatur, Alabama.  Pitts provided fraudulent information on the SBA Form 2483 representing that she was a sole proprietor, operating a business named “Sylvia L. Pitts,” and that the loan proceeds would be used for payroll and utilities. In support of the application, Pitts submitted a fraudulent 2019 Schedule C, indicating that her business, Pitts Cleaning Services, had gross receipts of $112,100, expenses of $10,636 and a net profit of $101,464. On July 22, 2020, the proceeds were deposited into Pitts’s checking account. Pitts made three withdrawals to liquidate the funds: July 30, 2020, in the amount of $8,800; August 6, 2020; in the amount of $6,000; and August 13, 2020, in the amount of $6,000.  Pitts used the loan proceeds to pay off personal debt and to pay for personal expenses.

A review of Pitts’s tax return filings shows that she filed two Schedule Cs with her 2019 tax returns—one for a cleaning business and the other for a lawn-care business.  Neither of the Schedule Cs reflected the information provided on the Schedule C submitted with her PPP loan application 

“Stealing taxpayer dollars through fraudulent schemes will not be tolerated,” said U.S. Attorney Williams. “The Paycheck Protection Program was created to help struggling businesses, not line the pockets of those who choose to abuse the system. Combatting fraud is a top priority of the Department of Justice and my office. We will aggressively pursue those who commit fraud and work with our law enforcement partners to ensure they are held accountable.” 

“The TVA OIG is committed to identifying and investigating fraud that negatively impacts the ratepayers of the Tennessee Valley, taxpayers, and United States Government,” said Assistant Inspector General for Investigations D. Eric Beals, U.S. Tennessee Valley Authority.  “This case presents another example of that commitment along with that of the United States Attorney’s Office and our other law enforcement partners.”

"Sylvia Pitts made false statements in connection with federal assistance programs, which undermines public confidence and divert resources from those who legitimately qualify for help,” said Acting Assistant Special Agent in Charge, Patrick M. Palmer, IRS Criminal Investigation, Atlanta Field Office.” IRS Criminal Investigation remains committed to working with our law enforcement partners to safeguard public funds and preserve the integrity of programs intended to serve those who legitimately qualify for assistance."

TVA-OIG and IRS-CID investigated the case. Assistant U.S. Attorney Davis A. Barlow prosecuted the case.