Fraud Discovered In Payroll Protection Program Loans: Prosecutors

ATLANTA — Federal fraud charges were filed against 10 people, including six Metro Atlanta residents, who stole more than $700,000 in COVID-19-related government aid, prosecutors said.

Encompassing multiple states, authorities said the individuals took advantage of the Paycheck Protection Program and the Economic Injury Disaster Laon, using made-up businesses to file fraudulent loan applications for upwards of $10,000 for that did not have to be repaid under some circumstances.

“The impact of COVID-19 on small businesses around the country has been devastating,” said Acting U.S. Attorney Kurt R. Erskine. “The defendants allegedly abused both programs by submitting fraudulent applications and obtaining thousands of dollars that should have gone to support struggling businesses. We will work tirelessly to protect the integrity of the EIDL and PPP and to help small businesses stay afloat.”

A discovery by the U.S. Postal Inspection Services and the Drug Enforcement Administration of methamphetamine hidden in dog food and shipped to one of the defendants led to the discovery of details of people in Houston, the Washington, D.C.-Metro area, and Metro Atlanta involved in a scheme to defraud the government of money through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

“The COVID-19 pandemic has caused financial hardships for many hardworking business owners across the nation. The CARES Act was signed to provide economic assistance to keep companies afloat while navigating through these uncertain times,” said Tommy D. Coke, Inspector in Charge of the Atlanta Division. “Postal Inspectors are committed to aggressively pursuing investigations in which the U.S. Mails are used to facilitate criminal schemes.”
In August 2020, DEA and Postal inspectors tracking drugs mailed to the Fayetteville home of 38-year-old Alicia Quarterman found a written ledger with personal and banking information for several individuals, prosecutors said.
Along with Katrina Lawson, 41, a former Futon County Sheriff’s deputy living in Houston, Quarterman learned the requirements for the PPP and EIDL programs and began submitting applications for friends and family members who didn’t actually own businesses, then charge a fee once the SBA or partner banks paid out the fraudulent loans.
They expanded the scheme by recruiting co-conspirators who would mostly text their bank and personal information to Quarterman, who would, in turn, provide the information to Lawson to submit the applications.
Federal prosecutors accused some of Lawson’s and Quarterman’s co-conspirators of recruiting more additional participants to funnel through the application process and also creating fake tax documents to support the bogus SBA applications.

Along with Lawson and Quarterman, the federal indictment includes:

• India Middleton, 34, of Accokeek, MD
• James McFarland, 56, of Atlanta, GA
• Tranesha Quarterman, 33, of Atlanta, GA
• Darryl Washington, 66, of Atlanta, GA
• Adarin Jones, a/k/a Adrian Jones, 42, of Atlanta, GA
• Katie Quarterman, 28, of Atlnata, GA
• Nikia Wakefield, 42, of Rockville, MD
• Victor Montgomery, 43, of Washington, D.C.

Charges against the named co-conspirators include various counts of bank fraud, mail fraud, wire fraud, conspiracy to commit wire fraud, and money laundering for a total of approximately $714,000, prosecutors said.