OKLAHOMA CITY – A woman whose record of criminal behavior extends back at least 15 years admitted defrauding the United States of $300,000 in loans intended for businesses that were experiencing the effects of the COVID-19 pandemic.
Madinah Malikah Montgomery, 33, of Oklahoma City, was sentenced to 24 months in federal prison for wire fraud and was ordered to pay $300,000 in restitution, Western District U.S. Attorney Robert J. Troester announced.
In response to the COVID-19 pandemic, the Small Business Administration expanded the Economic Injury Disaster Loan (EIDL) program in 2020 to provide loan assistance to struggling small businesses and other eligible entities.
Montgomery submitted an application in 2020 for an EIDL loan of $150,000 for her business. As part of the application, Montgomery falsely claimed she was the sole owner of a salon that had 10 employees and which had gross revenues of $600,000. As a result of her fraudulent application, the SBA approved the loan and deposited $149,900 to Montgomery’s bank account in Enid.
At the sentencing hearing on Nov. 22, federal prosecutors argued for a sentence of confinement, highlighting that during a threemonth span Montgomery fraudulently applied for three separate EIDL loans totaling $385,000, and ultimately received $300,000.
Montgomery pleaded guilty April 3 to filing a fraudulent EIDL application and using some of the initial $149,000 to pay for personal expenses.
U.S. District Judge Stephen P. Friot sentenced Montgomery to serve two years in federal prison, followed by three years of supervised release, and ordered her to pay $300,000 in restitution to the United States.
In announcing his sentence, the jurist noted the seriousness of Montgomery’s offenses. He also highlighted the length and serious nature of her criminal history, noting that the sentences she had received had not deterred her from continued criminal activity.
Public records reflect that Montgomery, who also is known as Kaylayla Michelle Haywood, has previous felony convictions that include:
• Possession of marijuana with intent to distribute and possession of drug paraphernalia, in an Oklahoma County District Court case from 2009.
• Grand larceny, in an Oklahoma County District Court case from 2014.
• Bringing contraband into a jail/penal institution, unlawful possession of a controlled drug with intent to distribute, and conspiracy, in a Beckham County District Court case from 2022.
Judge Stephanie C. Jones granted Montgomery a five-year suspended prison sentence on each of the three felony charges.
However, the judge ordered Montgomery to pay $1,500 in fines, $960 as reimbursement for the cost of her prosecution, a $100 drug abuse assessment fee, a $150 Oklahoma State Bureau of Investigation laboratory fee, $150 in DNA fees, and victim compensation assessments totaling $150. She also was ordered to perform 50 hours of community service and to work at a job and/or attend school 40 hours a week. In addition, Montgomery is ineligible to vote in an Oklahoma election.
Additionally, in a separate case in the Western District court, Montgomery has been charged by a federal grand jury with possession of 40 or more grams of fentanyl with intent to distribute in November 2023. She pleaded not guilty and is awaiting trial in January.
The business loan fraud case was investigated by the U.S. Secret Service, the Social Security Administration’s Office of Inspector General, the Oklahoma City Police Department, and the Internal Revenue Service – Criminal Investigations.
The case also was the result of an investigation by the Western District of Oklahoma Coronavirus Fraud Task Force.