5 Georgians Charged In $11.1M PPP Fraud Scheme: Feds

GEORGIA — Five Georgians are among the 22 defendants named in an alleged fraud scheme to steal roughly $11.1 million in Paycheck Protection Program loans and use them to buy luxury cars, jewelry and other personal items, the FBI said Thursday.

Six people, including the alleged scheme's "mastermind," Darrell Thomas, 35, of Duluth, have already pleaded guilty, the FBI said. Seventeen more defendants were charged Wednesday, including the five Georgians from Atlanta, Alpharetta, College Park, Marietta and Norcross.

• Meghan Thomas, 32, of Alpharetta, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, and false statements to a federally insured financial institution in connection with her involvement in several businesses’ loans.
• Jesika Blakely, 34, of Atlanta, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution, and money laundering in connection with her involvement in several businesses’ loans.
• John Gaines, also known as Marty Gaines, 56, of Marietta, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution and money laundering in connection with the loan obtained by Gaines Reservation and Travel.
• Charles Petty, also known as Charles Knight, 48, of Atlanta, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution and money laundering in connection with the loan obtained by Transportation Management Services Inc.
• Jerry Baptiste, 43, of College Park, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution and money laundering in connection with the loan obtained by Transportation Management Services Inc.
• Charles Hill IV, 45, of Norcross, is charged with conspiracy to commit wire fraud, wire fraud and money laundering in connection with the loan obtained by his business, Infinite Education Services Inc.

“The defendants allegedly took advantage of emergency financial assistance intended for business owners suffering the economic effects caused by the COVID-19 pandemic,” Acting U.S. Attorney Kurt R. Erskine said in a news release. “The charges reinforce our resolve to prosecute anyone who used pandemic relief funds for personal gain.”

According to Erskine and court information, the defendants allegedly submitted or assisted in the submission of PPP loan applications on behalf of 14 businesses, seeking loans of roughly $700,000-$850,000 for each company. The defendants fabricated Internal Revenue Service forms, W2 spreadsheets and bank statements in an attempt to provide proof of having employees and payroll expenses.

Turns out none of the businesses had employees or payroll expenses, according to the FBI.

After the PPP loans were deposited into the businesses' accounts, the businesses transferred more than $5.5 million of the PPP loan proceeds into accounts controlled by Thomas, allegedly for payroll and rental payments. But instead, the businesses used the funds for various personal expenses.

The FBI seized nearly $4 million in PPP loan proceeds, four luxury vehicles and several jewelry items.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form here.

“So many businesses needed federal emergency assistance to stay afloat during a pandemic, and these defendants allegedly misdirected millions of dollars of that assistance money to their own pockets for luxury items,” said Chris Hacker, special agent in charge of FBI Atlanta, in the release. “Their alleged greed affects every American taxpayer, and the FBI is making every effort possible to stop it and make sure PPP funds are used as intended.”