Six Charged in Connection with a $3 Million Paycheck Protection Program Fraud Scheme
(STL.News) Six individuals were charged in an indictment with fraudulently obtaining approximately $1.5 million in Paycheck Protection Program (PPP) loans on behalf of five businesses based in Georgia and South Carolina.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Bobby L. Christine of the Northern District of Georgia; Special Agent in Charge Chris Hacker of the FBI’s Atlanta Field Office; Special Agent in Charge Kevin Kupperbusch of the Small Business Association Office of Inspector General (SBA OIG) Eastern Region; and Special Agent in Charge Mark Maroni of the Treasury Inspector General for Tax Administration (TIGTA) Southeast Field Division made the announcement.
Rodericque Thompson, 43, of Atlanta, Georgia, Micah K. Baisden, 30, of Doraville, Georgia, Travis C. Crosby, 31, of Wellford, South Carolina, Keith A. Maloney Jr., 33, of Port Wentworth, Georgia, Tabronx W. Smith, 43, of Buford, Georgia, and Thomas D. Wilson, 30, of Atlanta, were charged in an indictment filed in the Northern District of Georgia with conspiracy to commit bank fraud, bank fraud, false statements to a financial institution, and money laundering.
These individuals were allegedly part of a larger group that together have fraudulently obtained approximately $3.0 million in PPP loans. To date, authorities have recovered approximately $1,195,784.98 of the stolen money.
The indictment alleges that Thompson recruited Baisden, Crosby, Maloney, Smith, and Wilson to apply for PPP loans on behalf of their respective businesses, PowerHouse Sports Academy LLC, Faithful Transport Services LLC, KMJ Transport LLC, Market Yourself LLC, and Rare Breed Nation LLC. With Thompson’s help, Baisden, Crosby, Maloney, Smith, and Wilson each allegedly obtained a $300,000 PPP loan by submitting loan applications containing numerous false and misleading statements about their businesses. Thompson allegedly aided the applicants in submitting the fraudulent loan applications in exchange for a percentage of the loan proceeds.
The following five individuals have pleaded guilty in connection with this alleged scheme:
Antonio D. Hosey, of Atlanta, Georgia, pleaded guilty to a one-count information charging conspiracy to commit wire fraud and money laundering(20-CR-396-LMM);
Timothy Williams, of Atlanta, Georgia, pleaded guilty to a two-count information charging conspiracy to commit wire fraud and making false statements(20-CR-339-LMM);
Stanley Dorceus, of Marietta, Georgia, pleaded guilty to a two-count information charging conspiracy to commit wire fraud and making false statements (20-CR-320-LMM);
Kenneth L. Wright, Jr., of Atlanta, Georgia, pleaded guilty to a two-count information charging conspiracy to commit wire fraud and making false statements (20-CR-285-LMM); and
Mark A. Stewart, of Greenville, South Carolina, pleaded guilty to a two-count information charging conspiracy to commit wire fraud and making false statements (20-CR-319-LMM).
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI Atlanta Complex Financial Crimes Task Force, SBA OIG, and the Treasury Inspector General for Tax Administration. Trial Attorney Michael P. McCarthy of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Diane D. Schulman of the U.S. Attorney’s Office for the Northern District of Georgia are prosecuting the case.