Chicago-Area Businesswoman Charged With COVID-Relief Fraud

CHICAGO – A Chicago-area businesswoman has been indicted on federal charges for allegedly fraudulently obtaining more than $440,000 in small business loans and grants under the federal Coronavirus Aid, Relief, and Economic Security Act and a State of Illinois pandemic-relief program.

KIMBERLY RAY-DUNCAN, 54, of South Holland, Ill., allegedly engaged in fraud related to the federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL), and the Illinois Back to Business Grant Program.  An indictment returned in the Northern District of Illinois alleges that Ray-Duncan used the fraud proceeds to purchase, among other things, a Regal 35 Sport Coupe yacht, purses by Prada, Gucci, and Saint Laurent, red leather dog collars by Gucci, sunglasses by Burberry, Gucci, Giorgio Armani, and Prada, and scarves by MCM, Louis Vuitton, Saint Laurent, Gucci, and Prada.

The indictment charges Ray-Duncan with six counts of wire fraud, three counts of money laundering, and two counts of engaging in monetary transactions involving criminally derived property.  Arraignment is set for Jan. 19, 2023, at 1:00 p.m., before U.S. Magistrate Judge Heather K. McShain.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Justin Campbell, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.  The U.S. Small Business Administration participated in the investigation.  The government is represented by Assistant U.S. Attorneys Maureen Merin and Anne L. Yonover.

Pursuant to the CARES Act, a PPP loan allows the interest and principal to be forgiven if businesses spend a certain amount of the proceeds on essential expenses, such as payroll and rent, while the EIDL Program provides loan assistance or grants to cover working capital and other operating expenses.  Under the Illinois Department of Commerce and Economic Opportunity’s Back to Business Grant Program, small businesses could apply for grants to cover lost revenue due to economic disruptions related to the Covid-19 pandemic.

According to the indictment, Ray-Duncan applied for and obtained loans and grants for numerous companies that she purportedly operated, including the K Ray-Duncan Assembly Company and An AlKymAri Production LLC.  Ray-Duncan made various false representations in her applications regarding the companies’ operations, number of employees, or revenue figures, the indictment states.  Some of the purported businesses did not actually exist, the charges allege.  Ray-Duncan attempted to substantiate the fraudulent representations by falsely preparing IRS forms and bank statements, the indictment states.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each count of wire fraud and money laundering is punishable by up to 20 years in federal prison, while the maximum sentence for each monetary transaction count is ten years.   If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

Anyone with information about attempted fraud involving Covid-19 can report it to the Department of Justice by calling the National Center for Disaster Fraud at (866) 720-5721, or by filing an online complaint at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.