Tennessee Residents Charged with COVID-19 Fraud

 Posted on September 08, 2021 in Criminal Defense

In an attempt to help alleviate the financial hardships that the COVID-19 pandemic brought to many businesses, the federal government established multiple programs that provided financial assistance, including the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. Unfortunately, while these programs did help prevent hundreds of thousands of companies from going out of business, they also created multiple opportunities for fraudulent claims. The U.S. Department of Justice is aggressively investigating and prosecuting these cases, as two Tennessee residents recently discovered.

U.S. Attorney’s Office Eastern District of Tennessee Announcements

In August, the DOJ’s Eastern District of Tennessee announced two separate cases of fraud connected to pandemic relief programs.

In one case, a Knoxville, TN woman pled guilty to one count of executing a wire fraud scheme. According to the announcement by the DOJ, the woman had applied for 10 loans, totaling $547,286 through the PPP and EIDL programs. These applications were submitted under companies that either did not exist or did not qualify for the loans. The woman submitted false records regarding the revenue the companies generated, the amount of employees she had, and the amount of payroll expenses the company had. She is scheduled to be sentenced in January 2022 and faces a sentence of up to 20 years in prison, supervised release of up to three years, and a fine of up to $250,000. The woman has agreed to pay restitution of $471,621.

In the second case, the DOJ announced an indictment of a Benton, TN woman. The woman has pleaded not guilty to charges of wire fraud and money laundering. She has also been charged with operating an unlicensed money transmittal business. This is often referred to as a money mule operation.

According to the indictment, the woman allegedly received, deposited, transferred, and then transmitted funds that were obtained fraudulently through the PPP program. If convicted of these federal charges, the woman could receive a sentence of up to 30 years in prison for the wire fraud charge, up to 10 years in prison for the money laundering count, and up to five years in prison for the money mule operation. She also faces significant fines, property forfeiture, and restitution.

DOJ Task Force

Several months ago, the DOJ issued a warning that they would be actively pursuing investigations of COVID-19 fraud. In May, the Attorney General announced that a task force was being established in order to combine the work of multiple agencies across the country in prosecuting suspected fraud. Hundreds of people have already been charged and it is anticipated that number could reach into the thousands. Because these charges are federal, the penalties for convictions are much harsher than charges at the state level.

Contact a Knox County Defense Lawyer

If you have been charged with COVID-19 fraud or any other fraud charges, you need a skilled Knoxville, TN fraud attorney who has extensive experience in defending clients against federal charges. Call Jeffrey Coller, Knoxville Criminal Defense Attorney at 865-281-1000 to schedule a free and confidential consultation and find out how we can help.

Sources:

https://www.justice.gov/opa/pr/attorney-general-announces-task-force-combat-covid-19-fraud

https://www.justice.gov/usao-edtn/pr/knoxville-woman-pleads-guilty-scheme-defraud-small-business-administration-s-covid-19

https://www.justice.gov/usao-edtn/pr/donna-j-clark-indicted-fraud-and-money-laundering-covid-19-related-ppp-loan-scheme