Westchester Native Gets Federal Time In $7.6M COVID Fraud Scheme

MOUNT VERNON, NY — A Westchester native has been sentenced to more than a decade behind bars for his part in a massive COVID-19 relief scam.

Matthew Podolsky, the Acting U.S. Attorney for the Southern District of New York, announced that 39-year-old Jacob Carter, a Mount Vernon native, who led a scheme to defraud the U.S. Small Business Administration of over $7.6 million, was sentenced on Thursday to 11 years in prison.

Carter and co-defendants Quadri Salahuddin and Anwar Salahuddin were convicted at trial on February 9, 2024, for conspiracy to commit wire fraud, wire fraud, and aggravated identity theft.

"Jacob Carter took advantage of a taxpayer-funded program intended to help small businesses in desperate need during the COVID-19 pandemic," Podolsky said. "Some small businesses that were eligible for and deserving of this money did not get it because funds ran out. Carter used his ill-gotten gains for far more selfish pursuits, including expensive jewelry and a Lamborghini. Thanks to the work of our law enforcement partners at the FBI and the career prosecutors of this Office, Carter has now received just punishment."

SEE ALSO:

• 'Guilty': Mount Vernon Men Convicted In $7.9M COVID Relief Scheme
• FBI: $7.6M COVID Relief Scam Rooted In The Hudson Valley

The SBA is a federal agency that administers assistance to American small businesses, including direct loans to applicants through the Economic Injury Disaster Loan ("EIDL") Program. In response to the COVID-19 pandemic, Congress expanded SBA's EIDL Program to provide small businesses with low-interest loans of up to $2 million prior to May 2020 in order to provide economic support to help overcome the loss of revenue small businesses were experiencing due to COVID-19. Applicants seeking a loan under the EIDL program were also permitted to request and receive an advance of around $1,000 per employee, up to $10,000, which the SBA usually provided while the loan application was pending.

According to court documents, from March through July 2020, Jacob Carter, Quadri Salahuddin, Anwar Salahuddin, and Crystal Ransom used the identities of more than 1,000 others to submit more than 1,000 online applications to the SBA, seeking over $10 million in funds through the SBA's EIDL Program.

In connection with the applications, the four falsely represented to the SBA that the applicants were the owners of businesses with 10 or more employees. However, the jury found that was a lie, and the applicants did not own businesses or employ people.

Based on the fraudulent applications, the SBA made advance payments of around $7.9 million to the applicants, who then kicked back a portion of the advance payments to Carter, the Salahuddins, and Ransom. After collecting hundreds of thousands of dollars in kickback payments, the four took photographs of their stacks of cash, purchased expensive jewelry, and Carter even leased a Lamborghini.

In addition to the prison term, Carter, currently of Capitol Heights, Maryland, was sentenced to three years of supervised release. He was also ordered to pay restitution in the amount of $7,737,000 to the SBA and forfeiture in the amount of $1,720,950.

Ransom pleaded guilty to conspiracy to commit wire fraud and was sentenced on April 24, 2024, to two years in prison followed by three years of supervised release with the first six months under home confinement. She was also ordered to pay restitution in the amount of $7,577,000 to the SBA and forfeiture in the amount of $99,000.

The Salahuddins are scheduled to be sentenced on March 26.

Podolsky praised the work of the FBI and the Air Force Office of Special Investigations.