Officials: 5 business owners charged in federal loan scheme
ATLANTA (AP) — Five small business owners are accused of fraudulently obtaining about $4 million in federal funds created to help businesses amid the pandemic, and using them for personal expenses.
The scheme began when four of the business owners submitted or helped submit loan applications that sought nearly $800,000 for each of their businesses under the Paycheck Protection Program, the U.S. Attorney’s Office for the Northern District of Georgia said in a news release Thursday.
Congress created the program to help smaller businesses and nonprofit groups — generally those with fewer than 500 employees — keep their workers on the payroll amidst the pandemic.
Officials said the businesses reported having over five dozens employees. Meanwhile, none of them had filed payroll tax forms with the IRS last year or for the first quarter of this year, federal authorities said. Four of the companies also submitted fake bank statements with their loan applications, the release said.
After the loans were deposited, authorities said four of the business owners transferred more than $2 million into two companies owned by one business owner in the group. Officials said none of the businesses that sent the money had legitimate business transactions with the companies.
The release said one of the owners also transferred nearly $335,000 to another company, and the owner of that business, Carla Jackson, allegedly used the funds to make payments on car loans.
One business owner used the funds to purchase two luxury vehicles. Authorities seized one of the vehicles, and nearly $3 million of federal funds from ten bank accounts during the course of the investigation.
Bern Benoit, 44, Andre Lee Gaines, 66, Kahlil Gibran Green, Sr., 46, Darrell Thomas, 34, face charges including money laundering, bank fraud and making false statements to a federally insured financial institution. Jackson, 52, is charged with money laundering.
It was not immediately clear if they had lawyers who could comment on their behalf. The case is part of Georgia’s Coronavirus Fraud Task Force.