Five Charged in Connection with an over $4 Million Paycheck Protection Program Fraud Scheme

Five individuals were charged in an indictment with fraudulently obtaining more than $4 million in Paycheck Protection Program (PPP) loans and using those funds, in part, to purchase luxury vehicles.  Authorities have seized a Range Rover worth approximately $125,000, jewelry, over $120,000 in cash, and over $3 million from 10 bank accounts at the time of arrest.

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.

Darrell Thomas, 34 of Johns Creek, Georgia, Andre Lee Gaines 66 of Dallas, Georgia, Kahlil Gibran Green Sr., 46, of Cleveland, Ohio, and Bern Benoit, 44, of Burbank, California, were charged in an indictment filed in the Northern District of Georgia with conspiracy to commit bank and wire fraud, bank fraud, wire fraud, false statements to a financial institution and money laundering.  Additionally, Carla Jackson, 52, of Tucker, Georgia was charged with money laundering.  Thomas, Gaines, and Jackson were arrested this morning and appeared this afternoon before U.S. Magistrate Judge Russell G. Vineyard of the Northern District of Georgia. 

The indictment alleges that Thomas, Gaines, Green, and Benoit submitted, or assisted in the submission of, PPP loan applications on behalf of five businesses – 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 – seeking 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.  The financial institutions approved and funded over $4 million in loans.

The indictment further alleges that shortly after receiving the PPP funds, Thomas, Gaines, Green, and Benoit transferred the money to secondary bank accounts, including an account controlled by Jackson.  After Jackson received the PPP funds, she further distributed the funds.  Additionally, Thomas purchased 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 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.

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 was investigated by the FBI and the SBA OIG.  Trial Attorney Siji Moore of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Tal Chaiken and Nathan Kitchens of the Northern District of Georgia are prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

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    The Justice Department and the U.S. Attorney’s Office for the District of Connecticut today announced an agreement with the City of Meriden, Connecticut to resolve allegations that the city violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) by denying the application of the Omar Islamic Center to establish a mosque in March 2019, and by maintaining a zoning code that treats religious assemblies and institutions on less than equal terms with nonreligious assemblies and institutions in nine zoning districts.
    [Read More…]
  • U.S.-Sudan Signing Ceremony on Bilateral Claims Agreement
    In Crime Control and Security News
    Cale Brown, Deputy [Read More…]
  • Justice Department Settles with Amtrak to Resolve Disability Discrimination Across its Intercity Rail System
    In Crime News
    The Justice Department today announced that it reached an agreement with Amtrak, the National Railroad Passenger Corporation, to resolve the department’s findings of disability discrimination in violation of the Americans with Disabilities Act (ADA). Under the agreement Amtrak will fix inaccessible stations and pay $2.25 million to victims hurt by its inaccessible stations.
    [Read More…]
  • Justice Department Settles with Florida Towing Company it Alleges Illegally Sold or Scrapped Servicemembers’ Vehicles
    In Crime News
    The Justice Department today reached an agreement with ASAP Towing & Storage Company (“ASAP”) in Jacksonville, Florida, to resolve allegations that ASAP violated a federal law, the Servicemembers Civil Relief Act (“SCRA”), by auctioning off or otherwise disposing of cars owned by protected servicemembers without first obtaining court orders. 
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  • Woman Charged in For-Profit Visa Fraud and Alien Smuggling Scheme
    In Crime News
    A Nevada woman was arrested today for her alleged role in a multi-year scheme to commit visa fraud and money laundering, and to illegally bring Chinese nationals into the United States for financial gain.
    [Read More…]
  • Briefing With Senior State Department Official On the New START
    In Crime Control and Security News
    Office of the [Read More…]
  • Denmark Travel Advisory
    In Travel
    Reconsider travel to [Read More…]
  • Request for Statements of Interest: FY20 China Programs
    In Human Health, Resources and Services
    Bureau of Democracy, [Read More…]
  • Former President of Nuclear Transportation Company Sentenced to Prison for Foreign Bribery and Other Offenses
    In Crime News
    The former president of Transport Logistics International Inc. (TLI), a Maryland-based transportation company that provides services for the transportation of nuclear materials to customers in the United States and abroad, was sentenced today to 48 months in prison and three years of supervised release for his role in a scheme to bribe a Russian official in exchange for obtaining contracts for the company.
    [Read More…]
  • Bankruptcy Filings Fall 11.8 Percent for Year Ending June 30
    In U.S Courts
    Despite a sharp rise in unemployment related to the coronavirus (COVID-19) pandemic, personal and business bankruptcy filings fell 11.8 percent for the 12-month period ending June 30, 2020, according to statistics released by the Administrative Office of the U.S. Courts.
    [Read More…]
  • U.S. Reinforces Commitment to Secure, Stable, Democratic, and Self-Reliant Afghanistan at 2020 Conference
    In Crime Control and Security News
    Office of the [Read More…]
  • Warsaw Process Humanitarian Issues and Refugees Working Group Convenes in Brasilia
    In Human Health, Resources and Services
    Office of the [Read More…]
  • Anti-Money Laundering: FinCEN Should Enhance Procedures for Implementing and Evaluating Geographic Targeting Orders
    In U.S GAO News
    To combat money laundering, the Financial Crimes Enforcement Network (FinCEN) issued a geographic targeting order (GTO) in 2016 that required title insurers to report information on certain all-cash purchases of residential real estate by legal entities in specified areas. According to FinCEN analysis, the use of legal entities to purchase high-value real estate, particularly in certain U.S. cities, was prone to abuse. FinCEN determined that imposing the real estate GTO reporting requirements on title insurers would cover a large number of transactions without unnecessary complexity. FinCEN renewed the real estate GTO multiple times—finding it has yielded information useful to law enforcement investigations—and periodically expanded the types of monetary instruments and geographic areas included and decreased the price reporting threshold (see fig.). Issuance and Renewals of the Real Estate Geographic Targeting Order (GTO) Unlike prior GTOs, which FinCEN officials said they issued at the request of and with the involvement of law enforcement agencies, FinCEN issued the real estate GTO on its own initiative. Thus, FinCEN had to take the lead in implementing and evaluating the GTO but lacked detailed documented procedures to help direct the GTO's implementation and evaluation—contributing to oversight, outreach, and evaluation weaknesses. For example, FinCEN did not begin examining its first title insurer for compliance until more than 3 years after issuing the GTO and did not assess whether insurers were filing all required reports. Similarly, while FinCEN initially coordinated with some law enforcement agencies, it did not implement a systematic approach for outreach to all potentially relevant law enforcement agencies until more than 2 years after issuing the GTO. FinCEN also has not yet completed an evaluation of the GTO to determine whether it should address money laundering risks in residential real estate through a regulatory tool more permanent than the GTO, such as a rulemaking. Strengthening its procedures for self-initiated GTOs should help FinCEN more effectively and efficiently implement and manage them as an anti-money laundering tool. Bad actors seeking to launder money can use legal entities, such as shell companies, to buy real estate without a loan. Doing so potentially can conceal the identities of bad actors and avoid banks' anti-money laundering programs. To better understand this risk and help law enforcement investigate money laundering, FinCEN issued its real estate GTO. Although GTOs are limited to 180 days, they may be renewed if FinCEN finds reasonable grounds for doing so. Because of concerns about the potential for bad actors to exploit regulatory gaps to launder money through the U.S. real estate market, GAO was asked to review FinCEN's real estate GTO. This report examines, among other things, the GTO's issuance and renewal, oversight, outreach, and evaluation. GAO reviewed FinCEN's records, orders, and policies and procedures; laws and regulations; and studies and other related materials. GAO also interviewed FinCEN, federal law enforcement agencies, and other stakeholders. GAO recommends that FinCEN provide additional direction for self-initiated GTOs, including how to plan for oversight, outreach, and evaluation. FinCEN concurred with GAO's recommendation. For more information, contact Michael E. Clements, (202) 512-8678, ClementsM@gao.gov.
    [Read More…]
  • NASA-Developed Ventilator Authorized by FDA for Emergency Use
    In Space
    The agency’s Jet [Read More…]