Six individuals, who operated as part of a larger group, have been indicted for fraudulently obtaining approximately $1.5 million in Paycheck Protection Program (PPP) loans on behalf of five businesses based in Georgia and South Carolina. Five others involved in this scheme have already pleaded guilty.
“The CARES Act, and the PPP, designated funds to aid struggling businesses during a pandemic,” said Acting U.S. Attorney Bobby L. Christine. “American businesses use these funds to help keep their companies and employees afloat during this unprecedented time. Scammers on the other hand seek an easy payday. We will continue investigating and prosecuting those who attempt to line their own pockets with these critical funds.”
“The FBI and our federal partners will make every effort to stop anyone from defrauding a federal program that provides financial assistance to companies trying to keep their heads above water during a pandemic,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “These defendants alleged personal greed affects every tax paying citizen in this country.”
“Conspiring to use SBA program funds for personal gain and greed is unconscionable,” said SBA OIG Eastern Region Special Agent-in-Charge Amaleka McCall-Brathwaite. “OIG and its law enforcement partners will relentlessly pursue fraudsters and bring them to justice. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
According to Acting U.S. Attorney Christine, the charges and other information presented in court: Rodericque Thompson allegedly recruited Micah Baisden, Travis Crosby, Keith Maloney, Tabronx Smith, and Thomas 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,
- Rare Breed Nation, LLC.
In exchange for a percentage of the loan proceeds, Thompson allegedly helped Baisden, Crosby, Maloney, Smith, and Wilson to obtain a $300,000 PPP loan by submitting loan applications that contained numerous false and misleading statements about their businesses. For example, each of the loan applications claimed to have 16 employees and monthly wages of $120,000. Additionally, identical fraudulent quarterly tax returns were submitted in connection with each loan application. The indictment alleges that the defendants used the PPP loan funds for impermissible purposes.
The group fraudulently obtained approximately $3 million in PPP loans. To date, authorities have recovered approximately $1,195,784.98, of the stolen money. Six 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. They are:
- 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,
- Thomas D. Wilson, 30, of Atlanta, Georgia.
The following five individuals have pleaded guilty in connection with this alleged scheme:
- Antonio D. Hosey, 38, 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, 30, 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, 34, 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., 33, 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, 54, 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).
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 is part of Georgia’s Coronavirus (COVID-19) Fraud Task Force, aimed at better protecting the citizens of Georgia from criminal fraud arising from the pandemic. Formed by Georgia’s leading state and federal prosecutors, the task force serves to open channels of communication between partner agencies and more rapidly share information about COVID-19 fraud, while ensuring each fraud complaint is reported to the appropriate prosecuting agency. The task force member agencies include the Office of the Governor of Georgia, the Office of the Attorney General of Georgia, the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Attorney’s Office for the Middle District of Georgia and the U.S. Attorney’s Office for the Southern District of Georgia. Georgia’s three U.S. Attorneys, the Attorney General of Georgia, and the Executive Counsel for the Governor’s Office serve on the task force. If you think you are a victim of a scam or attempted fraud involving COVID-19, contact the National Center for Disaster Fraud Hotline at 866-720-5721 or via email at www.justice.gov/DisasterComplaintForm.
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.
This case is being investigated by the FBI, the Small Business Administration Office of the Inspector General, and the Treasury Inspector General for Tax Administration (TIGTA.)
Special Assistant U.S. Attorney Diane C. Schulman of the U.S. Attorney’s Office for the Northern District of Georgia, and Trial Attorney Michael P. McCarthy of the DOJ Criminal Division’s Fraud Section are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.