Twenty-two defendants charged in connection with alleged $11.1 million Paycheck Protection Program fraud scheme

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:

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:

• Ricky Dixon, 52, of Warren, Michigan, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution, aggravated identity theft, and money laundering in connection with his involvement in the loan obtained by his business, RK Painting Co., and several other businesses’ loans.

• Meghan Thomas, 32, of Alpharetta, Georgia, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, and false statements to a federally insured financial institution in connection with her involvement in several businesses’ loans.

• Jesika Blakely, 34, of Atlanta, Georgia, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution, and money laundering in connection with her involvement in several businesses’ loans.

• Amanda Christian, 33, of Blythewood, South Carolina, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, and false statements to a federally insured financial institution in connection with her involvement in the loan obtained by her business, Advertising and Then Some Inc., and several other businesses’ loans.

• Dwan Ashong a/k/a Dwan Gilpin, 40, of Jacksonville, Florida, is charged with conspiracy to commit wire fraud, wire fraud, and money laundering in connection with her involvement in several businesses’ loans.

• John Gaines a/k/a Marty Gaines, 56, of Marietta, Georgia, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution, and money laundering in connection with the loan obtained by Gaines Reservation and Travel.

• Charles Petty a/k/a Charles Knight, 48, of Atlanta, Georgia, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution, and money laundering in connection with the loan obtained by Transportation Management Services Inc.

• Jerry Baptiste, 43, of College Park, Georgia, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution, and money laundering in connection with the loan obtained by Transportation Management Services Inc.

• Derek Parker, 56, of Rochester Hills, Michigan, is charged with conspiracy to commit wire fraud, wire fraud, and money laundering in connection with the loan obtained by his business, D Parker Holdings Inc.

• David Belgrave II, 49, of Lexington, South Carolina, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution, and money laundering in connection with the loan obtained by his business, Continuing Success Inc.

• Charles Hill IV, 45, of Norcross, Georgia, is charged with conspiracy to commit wire fraud, wire fraud, and money laundering in connection with the loan obtained by his business, Infinite Education Services Inc.

• Ryan Whittley, 35, of South Holland, Illinois, is charged with conspiracy to commit wire fraud, wire fraud, and money laundering in connection with the loan obtained by his business, ML Exotic Customs Inc.

• El Hadj Sall, 39, of Jacksonville, Florida, is charged with conspiracy to commit wire fraud, wire fraud, and money laundering in connection with the loan obtained by his business, Bellevie Corp.

• Rick McDuffie, 50, of Little Rock, South Carolina, is charged with conspiracy to commit wire fraud and wire fraud in connection with the loan obtained by his business, Mickies Auto and Tire LLC.

Three additional defendants have been charged by Criminal Information:

• Teldrin Foster, 39, of Decatur, Georgia, is charged with conspiracy to commit wire fraud in connection with the loan obtained by Bellator Phront Group Inc.

• Denesseria Slaton, 52, of Stockbridge, Georgia, is charged with conspiracy to commit bank fraud and wire fraud in connection with the loan obtained by Transportation Management Services Inc.

• Charmaine Redding, 27, of Macomb, Michigan, is charged with conspiracy to commit wire fraud in connection with the loan obtained by her business, All Star Room and Board Services of Michigan Inc.

• Another defendant, Carla Jackson, 53, of Tucker, Georgia, was previously charged by indictment on August 4, 2020 with money laundering in connection with laundering the proceeds of Gaines Reservation and Travel’s PPP loan. 

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:

• Darrell Thomas, 35, of Duluth, Georgia, pleaded guilty on June 16, 2021 to one count of conspiracy to commit bank fraud and wire fraud and one count of money laundering.  As part of his guilty plea, Darrell Thomas admitted his participation in fraudulent conduct totaling more than $14.7 million, including more than $11.1 million in fraudulent PPP loans, more than $1.15 million in fraudulent Economic Injury Disaster Loans, and more than $2.4 million in fraudulent automobile loans.  He also agreed to forfeit various assets, including more than $2.1 million in seized funds, three luxury vehicles – a 2018 Mercedes-Benz S-Class S65AMG, a 2018 Land Rover Range Rover, and a 2017 Acura NSX – and several items of jewelry, including a gold Rolex.  Darrell Thomas’s sentencing is set for September 15, 2021 before Judge J.P. Boulee.   

• Denesseria Slaton, pleaded guilty on June 16, 2021 to one count of conspiracy to commit bank fraud and wire fraud in connection with the loan obtained by Transportation Management Services Inc.  Slaton’s sentencing is set for October 6, 2021.

• Khalil Gibran Green, Sr., 47, of Cleveland, Ohio, pleaded guilty on September 1, 2020, to one count of conspiracy to commit bank fraud and wire fraud in connection with the loan obtained by his business, Impact Creations LLC.  On January 14, 2021, Judge J.P. Boulee sentenced Green to three years and five months’ imprisonment and five years of supervised release, and Judge Boulee ordered him to pay $830,000 in restitution, forfeiture of $157,035.71, and a special assessment of $100. 

• Bern Benoit, 45, of Burbank, California, pleaded guilty on March 11, 2021 to one count of conspiracy to commit bank fraud and wire fraud in connection with the loan obtained by his business, Transportation Management Services Inc.  Benoit’s sentencing is set for September 8, 2021 before Judge J.P. Boulee.

• Charmaine Redding, pleaded guilty on July 14, 2021 to one count of conspiracy to commit wire fraud in connection with the loan obtained by her business, All Star Room and Board Services of Michigan Inc.  Redding’s sentencing is set for October 21, 2021 before Judge J.P. Boulee.

• Andre Lee Gaines, 67, of Dallas, Georgia, pleaded guilty on June 17, 2021 to one count of making false statements to the FBI in connection with the loan obtained by his business, Gaines Reservation and Travel.  Andre Gaines’s sentencing is set for October 6, 2021 before Judge J.P. Boulee.

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.