Four individuals charged in COVID-19 loan fraud scheme

Editor's Note:
This matter occurred on date indicated, but not published at that time due to government shutdown. Press release posted and made available following the return to normal operations.   

HOUSTON – A 13-count indictment has now been unsealed alleging a scheme to defraud the Small Business Administration and Paycheck Protection Program-affiliated lenders during the COVID-19 pandemic, announced U.S. Attorney Nicholas J. Ganjei.

Decarla Conner, 42, Bastrop, Louisiana, has now made her initial appearance in federal court. Previously arrested were Randy Delrosario, 55, Katy, and Darrell Foster, 58, League City, while Enjoli Jeffrey, 44, Pearland, had surrendered to authorities.

A federal grand jury returned the indictment Sept. 24, charging all four individuals with conspiring to commit wire fraud. According to the indictment, they had devised a scheme to submit fraudulent PPP and Economic Injury Disaster Loan Program loan applications to the SBA and banks authorized to approve and fund PPP loans. They allegedly submitted false tax documents, including fake business tax returns, to support the loan applications.

Delrosario, Conner and Jeffrey are also charged with money laundering offenses. The conspirators are alleged to have used fraudulent loan proceeds to make large cash withdrawals and to pay for non-business expenses such as house payments, mortgage payments, personal travel, vehicles and jewelry. Some of the money was also used to pay kickbacks to another person for submitting the fraudulent loan applications, according to the indictment.

If convicted, each faces up to 20 years imprisonment for conspiracy and wire fraud as well as a $250,000 maximum possible fine. For his money laundering counts, Delrosario faces up to 10 and 20 years, while Conner and Jeffrey could receive up to 10 years for their counts. Convictions of money laundering also carry as a possible penalty either a $250,000 or $500,000 fine or twice the amount of property involved in the transaction.

Federal Housing Finance Agency – Office of Inspector General,

Treasury Inspector General for Tax Administration, Immigration and Customs Enforcement - Homeland Security Investigations, Small Business Administration – OIG and Federal Deposit Insurance Corporation – OIG conducted the investigation with the assistance of Harris County Constable’s Office Precinct One, League City Police Department, U.S. Marshals Service and Ouachita Parish Sheriff’s Office in Louisiana. Assistant U.S. Attorneys Stephanie Bauman and Shirin Hakimzadeh are prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.