The Department of Justice recently announced new charges, convictions and convictions as part of its ongoing initiative to target pandemic-related fraud, underscoring the government’s commitment to identifying and holding accountable those who allegedly exploited the pandemic for personal gain. Many counts carry a sentence of up to 30 years in prison. The most recent sentences for fraud related to COVID-19 ranged from five years probation to 15 years in prison. The federal government‘s continued focus on COVID-19 fraud indicates that business owners who have benefited from government assistance programs and who have concerns about their loan or forgiveness applications, their use of government funds or incorrect information that has been provided to their lender or the government, should be proactive and not wait to be contacted by investigators.
The CARES (Coronavirus Aid, Relief, and Economic Security Act), signed into law in March 2020, provided emergency financial assistance through the Paycheck Protection Program (PPP) in the form of forgivable loans to companies to cover payroll and other specified expenses. PPP loans have been issued in an effort to help businesses keep their workers employed during the COVID-19 crisis. The CARES Act also provided government assistance through the Economic Disaster Loan Program (EIDL). Similarly, loans provided under the EIDL program were intended to help small businesses recover from the economic effects of the pandemic.
As the government made loans to individuals and businesses at a rapid pace, borrowers made mistakes in their applications. Additionally, some applicants intentionally misrepresented their loan documents. A few weeks after the creation of the government assistance programs, the government began to investigate those who received the loans.
From the outset, the government pledged to ensure that it took steps to prevent recipients from fraudulently profiting from CARES Act programs.
New charges related to alleged COVID-19 fraud
- United States vs. Amber Singleton and Emanuel Tucker – Amber Singleton and Emanuel Tucker of California have been charged in the Central District of California with conspiracy to commit wire fraud and bank fraud, wire fraud, bank fraud, conspiracy to commit money laundering and money laundering, for their role in an alleged scheme to obtain $15.9 million in PPP and EIDL funds through fraud. The loan applications allegedly contained material misrepresentations about the businesses, including number of employees, average monthly payroll, gross revenues, cost of goods and supporting documents. The charge carries a maximum sentence of 30 years in prison.
- USA v Karen Sarkisyan, Gayk Akhsharumov and Babken Chalkadryan — Karen Sarkisyan, Gayk Akhsharumov and Babken Chalkadryan, all of California, have each been charged in the Central District of California with conspiracy to commit wire fraud, wire fraud, conspiracy to commit healthcare fraud health care fraud, conspiracy to commit money laundering, and money laundering for their role in an alleged scheme to submit false health insurance claims. The defendants allegedly used two hospice companies to submit more than $9 million in false and fraudulent Medicare claims. The charge carries a maximum sentence of 20 years in prison.
Recent Convictions Related to COVID-19 Fraud
- Mark Willard Johnson of Florida pleaded guilty in the Central District of Florida to bank fraud and money laundering in connection with a scheme to fraudulently obtain $544,900 in PPP and EIDL funds. The charge carries a maximum sentence of 30 years in prison.
- Lisa Hammell of New Jersey pleaded guilty in the District of New Jersey to conspiracy to defraud the United States and fraud in connection with identity documents in connection with a COVID-19 vaccination card fraud scheme . The charge carries a maximum sentence of five years in prison.
- Scott Davis of Texas pleaded guilty in the Southern District of Texas to wire fraud in a scheme to fraudulently obtain $3.3 million in PPP funds. The charge carries a maximum sentence of 20 years in prison.
Recent Convictions Related to COVID-19 Fraud
- Charles Petty of Georgia was sentenced to three years and 10 months in prison.
- Khalil Gibran Green Sr. of Ohio was sentenced to three years and five months in prison.
- Bern Benoit of California was sentenced to two years and three months in prison.
- Charmaine Redding of Michigan was sentenced to two years and three months in prison.
- Andre Lee Gaines of Georgia was sentenced to five years probation.
- Denesseria Slaton of Georgia was sentenced to three years and 10 months in prison.
- Amanda Christian of South Carolina was sentenced to three years and five months in prison.
- Derek Parker of Michigan was sentenced to one year and six months in prison.
- David Belgrave of South Carolina was sentenced to nine months in prison.
- Ryan Whittley of Illinois was sentenced to one year and nine months in prison.
What to expect next
The continued focus on fraud involving COVID-19 relief programs, including the most recent charges, convictions and sentences, indicates that the government is prepared to spend its resources to combat all levels of suspected fraud. . Investigations and prosecutions related to alleged pandemic-related fraud are only expected to increase in the coming months.
Individuals who have received government assistance under COVID-19 assistance programs should be aware that even if their loan amount was low or already canceled, the government may still investigate and prosecute them for fraud and other federal crimes. related. Any borrower concerned about CARES Act compliance or potential exposure to fraud should consult an attorney and not wait to be contacted by law enforcement. Being proactive can mean the difference between a civil issue and spending years in prison. Those who have ever received a subpoena or request from law enforcement should immediately consult an attorney who can assess the potential for civil and criminal exposure before responding to government requests.