Federal prosecutors in South Florida have filed charges against three local residents for their alleged participation in a scheme to file fraudulent loan applications seeking more than $24 million in forgivable Paycheck Protection Program (PPP) loans that are guaranteed by the Small Business Administration (SBA).
Damion O. McKenzie, 38, of Miami Gardens, Andre M. Clark, 46, of Miramar, and Keyaira Bostic, 31, of Pembroke Pines, were each charged in separate criminal complaints with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud. Attorney information was not available.
According to the criminal complaint, the trio, with the assistance of other co-conspirators, submitted fraudulent PPP loan applications for their respective companies. The PPP is a federal program designed to provide small American businesses affected by the coronavirus pandemic with funds for business-related expenses. Qualifying businesses can receive a two-year loan with a one percent interest rate. Congress has authorized over $650 billion in forgivable loans as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
“The United States made funds available to small business owners through the Paycheck Protection Program to ensure that our communities’ local businesses and their employees financially survive this pandemic,” said U.S. Attorney Ariana Fajardo Orshan. “Those who defraud the program with no regard for the effect that their actions of greed will have on small business owners and employees who legitimately need the money will be vigorously prosecuted by my office.”
The fraudulent loan applications that the three defendants filed were allegedly supported by doctored documents, including fake payroll tax forms and bank statements. After submitting the applications for their own companies, they allegedly became recruiters and referred other businesses to their co-conspirators for the purpose of submitting more fraudulent loan applications. The trio allegedly received kickbacks for any loans approved and funded for any client they referred to their co-conspirators.
Overall, the alleged scheme involved the submission of at least 90 loan applications, worth more than $24 million dollars. Many of the loan applications were approved and funded, paying out at least $17.4 million, according to sources.
“The defendants allegedly participated in an extensive nationwide scheme to file at least 90 fraudulent applications for millions of dollars in PPP loans in exchange for illegal kickbacks of portions of the loan proceeds,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “These allegations reflect an organized effort by defendants to defraud the SBA’s PPP program on a large scale by stealing funds intended for legitimate small businesses suffering from economic hardships caused by the COVID-19 pandemic.”
Any business owner suspected of committing fraud involving the federal government’s coronavirus-relief program should immediately consult an experienced attorney who can review the evidence and decide the best course of action.
South Florida Fraud Defense Attorney