Chilivis Grubman attorneys have discussed government enforcement efforts related to COVID-19 relief programs.  Since Congress enacted the various COVID-19 relief programs, the Department of Justice (“DOJ”) has actively prosecuted individuals who defraud these programs.  The Fraud Section of the DOJ has prosecuted over 100 defendants in over 70 criminal cases and has seized more than $65 million in illegal proceeds from the Paycheck Protection Program (“PPP”).  Moreover, U.S. Attorney General Merrick Garland announced the establishment of a COVID-19 Fraud Enforcement Task Force, which will coordinate the resources of the DOJ to combat and prevent fraud on COVID-19 related relief programs.  

There have been several announcements about indictments connected to fraud on COVID-19 relief programs, like the recent announcement related to a $3.6 million scheme, and the government is now announcing the sentencing of individuals guilty of defrauding such programs.  On July 30, 2021, The DOJ announced that several individuals were sentenced for their roles in schemes to defraud COVID-19 relief programs.  Andre Clark, of Miramar, Florida, pleaded guilty to conspiracy to commit wire fraud in May 2021 after he fraudulently obtained over $488,000 in PPP loan proceeds based on false information.  He also admitted to seeking over $6.7 million in PPP loans as part of a broader scheme.  Mr. Clark was sentenced to 33 months in prison and ordered to pay $2.97 million in restitution. 

Tonya Johnson, who conspired with Mr. Clark, was sentenced to 18 months in prison for fraudulently obtaining $389,000 in PPP proceeds based on false information and documents.  Ms. Johnson inflated the number of employees her business employed and its monthly payroll.  Another co-conspirator, Tiara Walker, was sentenced to 12 months and a day in prison for fraudulently obtaining $258,000 in PPP proceeds based on false information and documents.  Consistent with the scheme, Ms. Walker also inflated the number of employees her business employed and the monthly payroll.  Mr. Clark, Ms. Johnson, and Ms. Walker all allegedly conspired with James Stote, whose alleged role included submitting fraudulent PPP applications.  Mr. Stote was charged with wire fraud, bank fraud, and conspiracy to commit wire fraud.  His case is pending.

According to the press release, these cases were investigated by several agencies, including the IRS, FBI, and the SBA.  CG attorneys have discussed the government’s willingness to collaborate with various agencies to bolster its enforcement capabilities.  Recipients of COVID-19 relief funds should be diligent in complying with the respective program rules and requirements.  As the press release makes clear, the government will prosecute individuals that attempt to defraud COVID-19 relief programs. 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with government investigations, including fraud investigations and prosecutions.  If you need assistance with such a matter, please contact us today.