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Businessman accused of fraudulently obtaining relief funds

January 7, 2021 GMT

CHICAGO (AP) — Fraud and money laundering charges have been filed against a northern Illinois businessman who is accused of obtaining about $420,000 in loans through COVID-19 relief programs, the U.S. attorney’s office announced Thursday.

Carlos Smith, 56, of Park Forest is accused of lying on COVID-19 relief applications related to his business, Hammond, Indiana-based CLS Financial Services. In an application to the Paycheck Protection Program, from which he obtained $270,000, Smith, 56, allegedly stated his company had 61 employees and an average monthly payroll of $108,000. In fact, Smith had no employees and no payroll expenses as the business had no “ongoing operations,” the indictment stated.

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Smith allegedly also received $151,900 in federal funds through the Economic Injury Disaster Loans program. The initiative was meant to help small businesses cover operating expenses. In that application Smith allegedly falsely stated his company had two employees and $1.8 million in gross revenue in 2019.

Smith did not have an attorney listed in court records as of Thursday. Smith’s arraignment is scheduled for Jan. 14, before U.S. Magistrate Judge Manish Shah.