Strike Force Announces Three More Indictments

Posted on July 29, 2022Comments Off on Strike Force Announces Three More Indictments

U.S. Attorney’s Eastern Washington COVID-19 Strike Force Announces Three More Indictments

Today, Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced that a federal grand jury has indicted three additional individuals for COVID-19 Fraud as part of the Eastern Washington COVID-19 Strike Force. The Indictments announced today are the most recent charges brought by the Strike Force, which has brought criminal charges against numerous individuals and recovered millions of dollars in fraudulently obtained COVID relief funding.

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act provided a number of programs through which eligible small businesses could request and obtain relief funding intended to mitigate the economic impacts of the pandemic for small and local businesses. One such program, the Paycheck Protection Program (PPP), provided government-backed loans to small businesses which could be forgiven so long as the proceeds were used for payroll and other eligible expenses.

Another program, the Economic Injury Disaster Loan (EIDL) program, provided low interest loans that could be deferred until the conclusion of the pandemic to provide “bridge” funding for small businesses to maintain their operations during shutdowns and other economic circumstances caused by the pandemic. The PPP and EIDL programs have provided billions of dollars in aid, the vast majority of which have not been paid back, including hundreds of millions of dollars disbursed within Eastern Washington.

One Indictment announced today charges Stephanie and Stephen Murphy, ages 36 and 42, of Davenport, Washington, with nine counts of fraud for fraudulently-obtaining three PPP loans for fictitious landscaping and wood products manufacturing businesses in 2021. The second Indictment announced today charges Dondre Jackson, age 29, of Moses Lake, Washington, with six counts of fraud in connection with two fraudulently-obtained PPP loans for a fictitious catering business.

The Indictments allege that these businesses did not exist and that the Defendants falsified information and submitted fake documents to make it appear as though they were legitimate businesses that qualified for PPP loans, resulting in Defendants collectively obtaining over $100,000 in relief funding that was designated for legitimate small businesses struggling with the economic impact of COVID-19.

“COVID-19 relief programs were designed to lift up our community during crisis, and due to the number of people and businesses that requested funding, some deserving small businesses were not able to obtain funding to keep their businesses in operation,” said U.S. Attorney Waldref. “We created the Eastern Washington COVID-19 Fraud Strike Force because combatting pandemic-related fraud and holding those accountable who abused these programs is critical to the strength and safety of our community in Eastern Washington.

The Strike Force works to ensure that limited resources are used to protect our local small businesses and the critical jobs and services that they provide for the community.”

In February 2022, U.S. Attorney Waldref and the U.S. Attorney’s Office (USAO) began working with federal law enforcement agencies to create and launch a COVID-19 Fraud Strike Force that would leverage partnerships between different agencies to aggressively investigate and prosecute fraud against COVID-19 relief programs in Eastern Washington.

The Strike Force consists of agency representatives from the USAO, Small Business Administration (SBA) Office of Inspector General (OIG), Federal Bureau of Investigation (FBI), U.S. Department of the Treasury Inspector General for Tax Administration (TIGTA), U.S. Secret Service, U.S. Homeland Security Investigations, U.S. Department of Veterans Affairs OIG, General Services Administration OIG, Internal Revenue Service, Department of Energy OIG, and others.

“I commend the stellar investigative work on these cases performed by the Strike Force and especially in this case by SBA OIG, TIGTA, and the Secret Service,” said U.S. Attorney Waldref. “We will continue to work together with our law enforcement partners to vigorously prosecute those who abuse and misuse COVID-19 relief funding, and to strengthen our communities by protecting our small and local businesses.”

The fraud charges carry sentences of up to 20 years in federal prison as well as restitution for fraudulently-obtained funds. This case was investigated by the Eastern District of Washington COVID-19 Fraud Strike Force and by SBA OIG, TIGTA, and the U.S. Secret Service. The cases are being prosecuted by Assistant United States Attorneys Dan Fruchter and Tyler H.L. Tornabene.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

SOURCE: USDOJ.Today

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