From the Northern district of Ohio, the U.S. Department of Justice announced that two men pleaded guilty to perpetrating a nationwide fraud to the tune of $35 million through the paycheck protection program, which was supervised by the Covid Aid, Relief and Economic Security Act. The two men identified as James R. Stote aged 55 years from Hollywood and Phillip J. Augustin aged 52 of Coral springs.
Both men got access to by obtaining a loan for Mr. Augustin’s company with falsified documents, when they had submitted these documents, they again applied for another PPP loan this time a larger one that was to benefit them and their close associates, they began to operate a business out if it which involved recruiting loan applicants, submitting their fraudulent loan application with fake and documents in return for a fair share of the amount given as a loan. The total value of the loan application requested was $35million from 79 loan applications, they planned to do a lot more before they were apprehended.
The United states Assistant Attorney General Kenneth A. Polite Jr. affirmed that it was high time people were held accountable for defrauding the PPP program, and that they were going to ensure that scrupulous persons don’t illegally benefit from the program. This was reiterated by the first assistant Attorney General for the Northern district of Ohio where he mentioned that prosecuting persons who were defrauding the PPP remained a top priority for the government.
The two defendants who pleaded guilty would be sentenced at a subsequent date, and they may end up receiving a sentence of up to 20 years each.
Similarly, another defendant Diamond Smith pleaded guilty on the 4th of August to conspiracy to commit wire fraud in the southern district of Florida. He was sentenced to 20 months, he was a music recording artist who admitted to using his company to obtain a loan of $426,717 with fake and bogus documents, thereafter he sought for another loan to the tune of $708,065 for his other company, this defendant conceded to the fact that he used the funds to live a luxurious lifestyle and also paid the two former defendants $250,000 for their role in facilitating the loan request. In addition to his sentence, he was also mandated to pay the sum of $1,111345.23 as restitution and $1,134,782 as forfeiture.
Altogether, charges have been brought against 25 persons relating to defrauding the PPP program, these defendants are scattered across the Northern district of Ohio, Southern District of Florida, and the middle district of California. Out of these 25 defendants, about 20 have been convicted.