In Cincinnati, Ohio, a man formerly and currently incarcerated on state charges has been named in four counts of wire fraud related to Paycheck Protection Program loan fraud.
Willie Boyce, 41, was incarcerated in Hamilton County from March 2018 until September 2020, when he was released to a halfway house.
The federal indictment alleges Boyce applied electronically for two PPP loans in April 2021, claiming he owned a business named “Willie Boyce” that provided taxi and ridesharing services. Boyce submitted two separate applications on April 4 and April 9, 2021.
In his application, Boyce fraudulently claimed a gross income of $98,500 for 2019, even though he was in prison for the entire year. It is further alleged that as part of his applications, Boyce used his halfway house address as the business address and submitted a forged bank statement.
In May 2021, Boyce received more than $40,700 in COVID relief loans. That month, he allegedly spent the PPP loan money on purchases at Gucci, Louis Vuitton, Expedia, Hampton Inn and Delta Airlines.
Tiffany Bowlin, 33, of Charleston, West Virginia, pleaded guilty to a scheme to defraud the Paycheck Protection Program of $20,833 in COVID-19 relief loans guaranteed by the SBA under the CARES Act.
According to court documents and statements made in court, in April 2021 Bowlin applied for a PPP loan for her purported sole proprietorship, a hair salon operating under the business name “Tiffany Bowlin.”
Bowlin admitted that she falsely stated “Tiffany Bowlin” was established in 2019, when it in fact was not a legitimate business and had not engaged in substantial business activities on or before Feb. 15, 2020.
She further admitted submitting a false IRS Form 1040, Schedule C, stating that “Tiffany Bowlin” received $106,600 in gross income in 2020.
Bowlin submitted the loan application electronically from West Virginia, and it was uploaded to servers in Kansas for processing. Bowlin’s loan application was approved, and she received $20,833 via an electronic transfer to her personal bank account on May 13, 2021. Bowlin admitted that she spent the fraudulently obtained money to benefit herself personally and not for authorized business expenses.
Bowlin pleaded guilty to wire fraud and is scheduled to be sentenced May 4. Besides facing a potential prison sentence, Bowlin owes $20,833 in restitution.
Three California companies have agreed to pay $530,000 to settle allegations that they knowingly violated the False Claims Act when they received and retained more than one PPP loan prior to Dec. 31, 2020, in violation of program rules.
The offenders included La Baguette, which operates a bakery in Palo Alto, and Dynamic Integrated Solutions Inc., an industrial equipment supplier located in Santa Clara.
In addition, Priority Acquisitions Inc., a licensed general contractor located in Castro Valley, has agreed to pay $50,000 in civil damages and penalties to settle allegations that it received and retained a duplicate loan. The company agreed to repay the loan in full to its lender, relieving the SBA of liability for the federal guaranty of approximately $200,625.
The settlements resolve claims brought under the whistleblower provisions of the False Claims Act. Consequently, whistleblower J. Bryan Quesenberry will receive approximately $80,000 in connection with the three settlements.
A Michigan resident was charged last week with wire fraud in a criminal complaint for his alleged role in a scheme to obtain $963,000 from pandemic loan programs for fictitious businesses.
Accused is Ryan Carruthers, 42, of Commerce Township, Michigan.
According to the complaint, beginning in approximately April 2020 and continuing through April 2021, Carruthers applied for 14 loans in the names of various businesses from lenders participating in the Paycheck Protection Program.
Carruthers is also alleged to have applied for a 15th loan pursuant to the Economic Injury Disaster Loan program, a program in which the SBA provided direct loans to businesses adversely affected by the pandemic.
The complaint alleges Carruthers’s businesses were fictitious and the applications he submitted for these pandemic relief loans were fraudulent. Carruthers claimed that his various businesses, with names like “Cobra Kai Karate” and “Pure Juice Bar & Café,” had between 3 and 15 employees. The complaint states there is no evidence that any of these businesses had actual employees. Many of the businesses were not even incorporated until after March 2020, which would have rendered them ineligible for PPP loans.
The complaint further alleges that Carruthers applied for approximately $963,000 across 15 loans under these programs. Thirteen of the loans were actually funded, resulting in disbursements of approximately $851,000 on those loans. Carruthers is alleged to have used loan proceeds to pay off the balance of the mortgage on his home (approximately $251,000) and purchase a Sea-Doo personal watercraft, among other things.
Pierre Rogers, 44, of Irvine, California, was sentenced to 41 months in federal prison last week for conspiracy to commit wire fraud and bank fraud.
Rogers and his co-defendant, Joshua Leavitt, applied for dozens of PPP and EIDL loans for several companies they owned.
The applications inflated the companies’ revenues and number of employees and provided false supporting documents, including tax filings purportedly filed with the IRS. In total, the defendant participated in 22 fraudulent loan applications and modification requests totaling over $4.8 million. Rogers obtained $803,756 in CARES Act funds.
Rogers also misused a significant portion of the CARES Act funds. For example, he spent $107,780 to purchase a 2011 Rolls Royce Ghost and another $56,000 to purchase a Porsche. He also spent CARES Act funds on clothing and jewelry from luxury retailers, resort stays and high-end meals such as sushi and steak.
Congress irked by foreign hackers
The U.S. Secret Service announced last August it recovered $286 million in COVID relief funds that were earmarked for small businesses but instead were siphoned off by fraudsters who used several thousand stolen or fake identities.
The Secret Service also announced it and the Small Business Administration’s Office of Inspector General have seized more than $1 billion stolen through the Economic Injury Disaster Loans COVID-relief program.
The Oversight Committee in the U.S. House of Representatives pressed the Secret Service last week for details about state-sponsored foreign hackers linked to China who stole at least $20 million in COVID relief funds that included SBA loans and unemployment insurance benefits from more than a dozen unidentified states.