Latoya Stanley, 38, and Johnny Philus, 33, were arrested Wednesday and charged in Miami federal court with committing wire fraud and making false statements. They were both released on $100,000 bond. Attorney information was not available.
According to the criminal complaint, the two accused persons allegedly applied for four fraudulent loans through the federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. The first two applications were reportedly filed in May and June 2020 for Dream Gurl Beauty Supply and Elegance Auto Boutique at 1275 NE 118th Street.
They purportedly claimed the beauty store had 18 employees with $200,000 worth of inventory, and the auto business had 29 employees and leased a fleet of up to 50 vehicles worth $1 million. However, records show that both businesses are inactive. The loans were approved and funded; Dream Gurl Beauty Supply received $302,860 to cover payroll expenses, and Elegance Auto Boutique received a loan of $538,325, according to the complaint.
The complaint further alleges that the pair sought loans from the EIDL program for two non-existent farms in North Miami. According to the complaint, the female defendant claimed to run a farm that generated $800,000 in income and employed five people at 1275 NE 118th Street, while the male defendant claimed he operated a farm that generated $400,000 in income and employed ten people on a small residential lot at 535 NW 127th Street. Those loans were also approved and funded, sources indicate. The woman received $137,500 and the man received $150,000 from the EIDL program to cover business-related expenses. In total, the pair allegedly received an estimated $1.1 million in fraudulent loans.
The PPP and EIDL are federal COVID-19 relief programs authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was passed by Congress in March 2020. The loans, which are guaranteed by the Small Business Administration (SBA), are meant to provide emergency financial assistance to small American businesses struggling with the economic effects of the coronavirus pandemic. Congress authorized over $650 billion in loans for small businesses to cover employee payrolls, rent and utilities, and interest on mortgages and other loans issued by banks.
These programs have been exploited by certain applications, authorities said. For example, last month a Miami man allegedly obtained $4 million in PPP loans for his company and spent a portion of the money on a Lamborghini and other personal expenses that are not authorized under the terms of the loan.
Any individual suspected of committing fraud in South Florida related to federal loan programs should immediately consult an experienced fraud defense attorney. A good attorney can examine the evidence, conduct an independent investigation, and determine the best course of action to minimize the potential penalties.
Miami Fraud Defense Attorney
Are you accused of committing fraud in South Florida involving federal COVID-19 relief programs? Contact Brian Silber, P.A. to set up a free initial consultation with one of Miami’s most experienced fraud defense attorneys.