Two Florida residents were arrested in Ohio for defrauding banks and the United States Federal Government in a nationwide fraud scheme. On December 14, they pleaded guilty to wire fraud charges. The criminal partnership fraudulently requested, and successfully obtained over $35 million in Paycheck Protection Program (PPP) loans, which are guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
James R. Stote from Hollywood, Florida and Phillip J. Augustin from Coral Springs, Florida obtained PPP loans for Augustin’s company, Clear Vision Music Group LLC. The pair falsified loan documents to convince administrators to extend lines of credit to them. The applications contained fake payroll information, IRS forms, and bank statements.
PPP loans were intended to support and aid businesses in keeping their doors open during the COVID-19 pandemic. These defendants, and others involved in this type of conspiracy, have taken advantage of a makeshift, vulnerable administrative system for their own profit. The defendants stole millions of taxpayer dollars intended to support struggling businesses, and instead spent it on themselves.
This case is just one in a slew of similar cases, cementing the Justice Department’s intent to crack down on theft of government funds. Cracking down on PPP loan theft remains an ongoing priority for the Justice Department.
Loan Fraud: Charges
In this case, the defendants each pleaded guilty to conspiracy to commit wire fraud. Although they have not yet been sentenced, they each face a maximum penalty of 20 years in prison, coupled with severe financial penalties.
Individuals facing charges of wire fraud, fraud, or a related charge face serious jailtime and criminal punishment. The federal judiciary has been particularly harsh in the prosecution and punishment of individuals charged with defrauding government entities.
For more information relating to your criminal fraud charges, contact Miami criminal defense attorney Ralph Behr at 800-761-3446 for a free consultation.