Former Seattle resident indicted for bank fraud for allegedly stealing more than $500,000 from Paycheck Protection Program
Submitted false documents to multiple banks claiming pandemic benefits
Seattle – A 28-year-old New York City man was indicted this week in the Western District of Washington for three counts of bank fraud related to his abuse of the COVID-19 Pandemic Paycheck Protection Program (PPP), announced U.S. Attorney Nick Brown. Donte Jamal McClellon was a resident of Seattle when he submitted falsified documents to obtain $500,948 in loan proceeds from three different banks in May and June 2020. Under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act such funding was supposed to help small businesses weather the pandemic storm.
“Those who swooped in early with false and forged documents to claim loan funds, robbed legitimate businesses of the assistance they needed,” said U.S. Attorney Nick Brown. “Prosecuting pandemic fraud is a top priority of the Department of Justice and an ongoing focus for investigators here in Seattle.”
According to records filed in the case, McClellon used the names of three limited liability corporations he had once registered in the State of Washington to make his claims. Each of the entities, ‘Frostlake,’ ‘Cannonlake,’ and ‘Skylake’ LLC, had been inactive and showed no signs of business activity in any state or federal registries in the years leading up to the pandemic. Nevertheless, in May and June 2020, McClellen submitted Paycheck Protection program applications claiming the entities each had as many as 13 employees and, in one case, gross receipts of more than $1.6 million. McClellan allegedly forged multiple Internal Revenue Service forms to make it appear the three companies were operating real estate or retail businesses, with employees who would benefit from the Paycheck Protection Program loans. McClellan claimed the businesses operated out of his home address in Seattle. The investigation revealed there was no business activity at that address.
The loan funds were disbursed to bank accounts that McClellon had set up just days before he made the loan applications. The proceeds were then moved to a personal bank account controlled by McClellon.
McClellon is scheduled to appear for arraignment on the indictment on May 31, 2022. Bank fraud is punishable by up to 30 years in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by The FBI Seattle Field Division with assistance from FBI New York and the Small Business Administration Office of Inspector General (SBA-OIG).
The case is being prosecuted by Assistant United States Attorney Sok Tea Jiang.
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 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 via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.