The Paycheck Protection Program (PPP) has arrested seven people, including three from Massachusetts, for allegedly participating in a multi-state plan to fraudulently receive millions of dollars in PPP money for themselves and others.
Following their initial court appearances in the Northern District of Georgia, Eastern District of Tennessee, Southern District of Florida, and District of Massachusetts, the defendants were each granted conditional releases.
Conspiracy to file fraudulent PPP( Paycheck Protection Program) applications
Ford, Brown, Pierre, and Alexandre are charged with conspiring to file fake PPP ( Paycheck Protection Program) applications on behalf of various actual or supposed enterprises and non-profit organizations, including businesses owned by Dessaps and Mathurin, in order to obtain kickback payments from the borrowers.
It is claimed that in April and May of 2020, shortly after PPP ( Paycheck Protection Program) funding initially became available in April 2020, Ford, who at the time managed three ostensibly business or non-profit firms in Florida, applied to numerous lenders for PPP loans for those entities. Ford is accused of lying on its applications about the staffing levels and total payroll for these companies. Therefore, Ford was able to secure PPP funding in the amount of $168,121 for these organizations.
Ford allegedly started applying for PPPs on Pierre’s and Alexandre’s behalf in June of 2020. Ford is accused of submitting applications with fabricated supporting documents that exaggerated the number of employees and monthly payroll costs. These applications allegedly led to PPP loans of $300,000 and $20,833 for Alexandre and Pierre, respectively.
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Ford gave bribes to acquire PPP loans
Allegedly securing PPP financing for at least 27 debtors between June and August of 2020, Ford is accused of fraud in the charging documents. Pierre, Alexandre, and others allegedly located prospective employees and shared that information with Ford and Ford’s spouse, Brown. Ford submitted online loan applications for the borrowers, using fictitious employee counts and monthly payroll costs.
Ford is accused of making false statements on PPP applications in order to qualify for funding of around $7 million. Borrowers who were approved for PPP loans based on these bogus applications allegedly paid bribes to Ford and Brown, Pierre, Alexandre, and others, usually in the range of 10–20% of the loan amount. Almost $500,000 went to Ford and Brown individually, while over $1 million went to Ford, Brown, Pierre, and Alexandre as kickbacks from debtors.
The complaint states that in June 2020, Rhau introduced Alexandre to Dessaps, who ran a used car dealership in Abington, Massachusetts, and Mathurin, who allegedly ran a warehouse and cargo delivery business. Brown and Ford allegedly submitted PPP applications to Kabbage after receiving information about Dessaps’ and Mathurin’s firms from Alexandre and Pierre. Dessaps lied on his dealership application, claiming the business employed 40 people and spent an average of $334,720 each month on wages. Mathurin’s company erroneously claimed on its application that it employed 25 people and had monthly payroll costs of $125,541. Ford is accused of including phoney wage and tax documents in his application. After considering the petitions, Kabbage lent Dessaps $836,800 and Mathurin $313,852.
Dessaps and Mathurin allegedly gave kickbacks to Alexandre after receiving this cash, and Mathurin made additional payments to Rhau totalling $45,000. Dessaps is accused of using the money he obtained from the PPP to buy a Rolls Royce, pay $32,000 to French Bulldog breeders, and buy a new home in South Easton under his sister’s name. Mathurin supposedly paid himself and two others, who claimed to be company partners, significant sums of money.
The charging documents also state that between April 2020 and April 2021, Rhau filed applications to lenders that contained misrepresentations in order to fraudulently receive $104,166 in PPP funding and $94,800 in other pandemic relief money.
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Penalities
Possible penalties for a conviction on charges of conspiracy to conduct wire fraud include a maximum of twenty years in prison, three years of supervised release, and a fine of two times the greater of $250,000 or the gross gain or loss incurred as a result of the deception. If convicted of conspiring to engage in illegal financial dealings, offenders face up to ten years in prison, three years of supervised release, and a fine of $250,000 or double the value of the property obtained by criminal means, whichever is greater. A federal district court judge imposes sentences in criminal cases in accordance with the U.S. Sentencing Guidelines and other relevant statutes.
It was announced today by US Attorney Rachael S. Rollins and IRS Criminal Investigations Boston Special Agent in Charge Joleen D. Simpson. The case is being prosecuted by Assistant United States Attorneys David M. Holcomb of the Securities, Finance, and Cyber Fraud Section and Alexandra W. Amrhein of the Asset Recovery Unit, both of Rollins.
The COVID-19 Fraud Enforcement Task Force
The COVID-19 Fraud Enforcement Task Force was established by the Attorney General on May 17, 2021, to better coordinate and mobilize the resources of the Department of Justice with other government agencies in the fight against and prevention of pandemic-related fraud. By, for example, enhancing 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, the Task Force strengthens efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud.
For more articles (POGO) Project on Government Oversight: The Feds messed up their review of billions of dollars in questionable PPP loans- 2020
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