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Press Release
Press Release
ATLANTA – Seventeen more individuals have been charged in connection with a fraudulent scheme to obtain approximately $11.1 million in Paycheck Protection Program (PPP) loans and to use those funds to purchase luxury vehicles, jewelry, and other personal items. To date, a total of 22 individuals have been charged in connection with the fraudulent scheme. Six individuals, including the scheme’s mastermind, Darrell Thomas, have pleaded guilty.
“The defendants allegedly took advantage of emergency financial assistance intended for business owners suffering the economic effects caused by the COVID-19 pandemic,” said Acting U.S. Attorney Kurt R. Erskine. “The charges reinforce our resolve to prosecute anyone who used pandemic relief funds for personal gain.”
“So many businesses needed federal emergency assistance to stay afloat during a pandemic, and these defendants allegedly misdirected millions of dollars of that assistance money to their own pockets for luxury items,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Their alleged greed affects every American taxpayer, and the FBI is making every effort possible to stop it and make sure PPP funds are used as intended.”
“When tragedy strikes and citizens find themselves in a vulnerable situation to no fault of their own, the influx of government assistance unfortunately also attracts criminals,” said IRS-Criminal Investigation Special Agent in Charge James E. Dorsey. “While the government is helping those in need, law enforcement is swiftly addressing these vulnerabilities. IRS-CI will continue to help illuminate these criminal deeds with our financial expertise.”
“The Treasury Inspector General for Tax Administration aggressively pursues those who endeavor to defraud programs afforded to the American people under the CARES Act,” said J. Russell George, the Treasury Inspector General for Tax Administration. “We appreciate the efforts of the Department of Justice and our law enforcement partners in this effort.”
“Scheming to fraudulently obtain federal funds that are meant to provide assistance to nation’s small businesses is unacceptable,” said SBA OIG’s Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite. “Our Office will remain relentless in the pursuit of fraudsters who seek to exploit SBA’s vital economic programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to seeing justice served.”
According to Acting U.S. Attorney Erskine, the first superseding indictment, and other information presented in court: From April 2020 through August 2020, the conspirators in the scheme allegedly submitted, or assisted in the submission of, PPP loan applications on behalf of fourteen businesses, seeking loans of approximately $700,000 - $850,000 for each company:
Business Name |
PPP Loan Amount |
Bellator Phront Group Inc. |
$799,955.35 |
Impact Creations LLC |
$830,000 |
Gaines Reservation and Travel |
$806,710 |
Transportation Management Services |
$830,417 |
Lee Operations LLC |
$805,813 |
RK Painting Co. |
$775,000 |
D Parker Holdings Inc. |
$818,102 |
Continuing Success Inc. |
$727,000 |
All Star Room & Board Services of Michigan Inc. |
$737,965 |
Infinite Education Services Inc. |
$854,805 |
ML Exotic Customs Inc. |
$797,275 |
Bellevie Corp. |
$823,585 |
Advertising and Then Some Inc. |
$760,207 |
Mickies Auto and Tires LLC |
$787,160 |
Total |
$11,153,994 |
In the loan applications, the defendants certified that each applicant business was in operation on February 15, 2020 and had employees for whom it paid salaries and payroll taxes or paid independent contractors; that the funds would be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments; and that the information provided in the application and in all supporting documents and forms was true and accurate in all material respects.
The PPP loan applications reported that each business had between 59 and 69 employees and approximately $295,000 to $342,000 in average monthly payroll expenses. To support these payroll figures, each business’s loan application was accompanied by an Internal Revenue Service Form 941, which employers use to report payroll taxes, for each quarter of 2019 and by a bank statement or a spreadsheet reflecting payroll expenses. In reality, however, none of the businesses had employees or payroll expenses. The Form 941s, bank statements, and W2 payroll spreadsheets had all been fabricated. Indeed, some of the supporting documents the businesses submitted were substantively identical, including identical Form 941s, identical bank statements, and W2 payroll spreadsheets where the reported figures were identical but purported employee names had been changed.
After the PPP loan proceeds were deposited into the businesses’ accounts, the businesses transferred more than $5.5 million of the PPP loan proceeds into accounts controlled by Darrell Thomas, purportedly for rental payments and payroll. However, none of the businesses had any legitimate business with any of the businesses or accounts to which they sent the proceeds. Based on the investigation, none of the companies allegedly engaged in any business-related transactions or used the PPP loan proceeds for any authorized purposes. Instead, the businesses used the funds for various personal expenses. In connection with the investigation, the United States seized nearly $4 million in PPP loan proceeds, four luxury vehicles, and several jewelry items.
Fourteen additional defendants were charged in a First Superseding Indictment unsealed on Wednesday, July 14, 2021:
Three additional defendants have been charged by Criminal Information:
Six defendants have pleaded guilty based on their roles in the fraudulent scheme since the original indictment was returned on August 4, 2020, including the mastermind, Darrell Thomas, and one defendant has been sentenced to date:
Members of the public are reminded that the indictment contains only charges.
This case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, the U.S. Treasury Inspector General for Tax Administration, and the Small Business Administration-Office of the Inspector General.
Assistant U.S. Attorneys Tal Chaiken and Nathan Kitchens of the Northern District of Georgia and Trial Attorney Siji Moore of the Criminal Division’s Fraud Section are prosecuting the case.
On May 17, 2021, the Attorney General 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. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts, For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.