Louisville, KY – Five people were arrested today in Kentucky, Indiana, and Colorado on federal charges for their role in a scheme to fraudulently obtain approximately $1.6 million in COVID-19 relief funds.Colin McDonald, Assistant Attorney General for the National Fraud Enforcement Division, U.S. Attorney Kyle G. Bumgarner of the Western District of Kentucky, Special Agent in Charge Kelly Moening of the Treasury Inspector General for Tax Administration (TIGTA) Great Lakes Field Division made the announcement.On April 8, 20216, a federal grand jury in Louisville returned an indictment, which charges two individuals—Kaelynn Greene, 31, and Camden Newton, 32—with wire fraud, conspiracy to commit wire fraud, aggravated identity theft, and money laundering, all related to fraudulently obtaining COVID-19 financial assistance program funds. The indictment also charges Betty Walker a/k/a Betty Bailey, 39, Breanna Patterson, 32, and Jordan Greene, 34, with conspiracy to commit wire fraud.According to the indictment, for over two years, Kaelynn Greene and Camden Newton engaged in a scheme to fraudulently obtain Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) Loans through fraudulent statements on applications, either in their own names, through entities they created, or through stolen identities. Greene also conspired with Betty Walker, Breanna Patterson, and Jordan Greene, and others to recruit borrowers who were ineligible for PPP loans to submit fraudulent PPP loan applications on their behalf. In the applications, they falsely claimed the borrowers operated businesses that did not exist and that would have otherwise qualified them for loans, or over inflated minimal business activity. To bolster their applications, the defendants created fake tax forms that were also submitted as part of the loan process. As a result, Greene and others obtained PPP loan proceeds to which the borrowers were not entitled. Greene was further compensated by receiving kickbacks from the borrowers. In total, the defendants combined caused more than 20 EIDL applications and more than 50 PPP applications to be filed on behalf of ineligible borrowers. The fraudulent applications resulted in disbursement of more than $850,000 in fraudulently obtained federal funds and attempts to obtain an additional more than $750,000 in such loan proceeds that were declined.As the indictment alleges, these fraudulent schemes took advantage of federally funded programs created through the Coronavirus Aid, Relief, and Economic Security Act (CARES) for the purpose of assisting individuals and small businesses who struggled financially during the COVID-19 pandemic. Those funds were generally administered by the Small Business Administration through two programs. First, the SBA provided PPP loans designed to provide a direct incentive for small businesses who were in operation on February 15, 2020, to keep their workers on the payroll. PPP loan proceeds were required to be used by the business on certain permissible expenses…
Source: U.S. Department of Justice