PPP COVID Fraud Scheme. official court document snapshot by 1stcounsel.com

Alan Gray covers a range of legal news. He is also the editor of NewsBlaze.

Four businessmen and one woman who allegedly defrauded the Federal government through the Paycheck Protection Program have been indicted for obtaining loans worth more than $4 million. They allegedly used a fraud scheme to appropriate the funds for their own use, including the purchase of luxury vehicles.

$3 million files stored in 10 bank accounts and authorities seized approximately $120,000 in cash, a Range Rover, a Mercedes, and jewelry.

The Northern District of Georgia filed the indictment for the five; Darrell Thomas, 34 of Johns Creek, Georgia; Andre Lee Gaines 66 of Dallas, Georgia; Kahlil Gibran Green Sr., 46, of Cleveland, Ohio; Bern Benoit, 44, of Burbank, California; and Carla Jackson, 52, of Tucker, Georgia,

Jackson was charged with money laundering, and the four men were charged with conspiracy to commit bank and wire fraud, bank fraud, wire fraud, false statements to a financial institution and money laundering. Thomas, Gaines, and Jackson were arrested on the morning of the 7th, and appeared in the afternoon before U.S. Magistrate Judge Russell G. Vineyard of the Northern District of Georgia.

The four business owners are alleged to have falsified IRS Form 941s for each quarter of 2019.

A DOJ press release noted that “Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division; U.S. Attorney Byung J. “BJay” Pak of the Northern District of Georgia; Special Agent in Charge Chris Hacker of the FBI’s Atlanta Field Office; and Special Agent in Charge Kevin Kupperbusch of the Small Business Association Office of Inspector General (SBA OIG) Eastern Region made the announcement.”

The government’s indictment alleges that Thomas, Gaines, Green, and Benoit “submitted, or assisted in the submission of Paycheck Protection Program loan applications on behalf of their businesses and one other. The businesses were Bellator Phront Group Inc. (owned by Thomas), Gaines Reservation and Travel LLC (owned by Gaines), Impact Creations LLC (owned by Green), Transportation Management Services, Inc. (owned by Benoit), and Lee Operations LLC – sought loans of approximately $800,000 for each company.  Thomas, Gaines, Green, and Benoit caused to be submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ number of employees and payroll expenses.”

More than $4 million in loans were approved from the applications, and they were funded by three separate financial institutions and five affiliate banks.

The financial institutions were in Fort Lee, New Jersey; Salt Lake City, Utah; and Laguna Hills, California.

After receiving the PPP funds, the four men transferred the money received to secondary bank accounts, including one account controlled by Jackson. After Jackson received the PPP funds, she distributed the funds further.

Next, Thomas purchased both luxury vehicles, a 2018 Mercedes-Benz S-Class S65AMG and a 2018 Land Rover Range Rover. In the days and weeks following the disbursement of PPP funds, the indictment alleges that Thomas, Gaines, Green, and Benoit did not make payroll payments as they claimed they would on their loan applications.

The one percent interest loans were meant to pay for payroll costs, interest on mortgages, rent and utilities. The law allows both the interest and principal to be forgiven if the business spends the money on the stated expenses within a set time period and at least a certain percentage of the loan goes towards payroll expenses.

The five defendants are presumed innocent until proven guilty.