Charlottesville, Va; Seven Charged in Connection with Over $750,000 Money Laundering Scheme Involving Funds From Paycheck Protection Program | USAO-SC
(STL.News) – United States Attorney Peter M. McCoy, Jr., announced today that seven individuals were charged in an indictment with laundering over $750,000 of fraudulently obtained funds, including over $390,000 from a Paycheck Protection Program (PPP) loan. The defendants used a variety of methods to launder the money, including laundering the money through a casino. The indictment also identifies over $2.1 million in funds which agents seized from twelve different bank accounts allegedly associated with the overall fraud scheme. According to the Department of Justice (DOJ), the indictment marks the 50th PPP-fraud case to date across the country.
The case started as an Organized Crime Drug Enforcement Task Force (OCDETF) investigation that targeted high-level heroin and methamphetamine traffickers located in Greenville. That initial investigation has also resulted in the indictment and arrest of eight other individuals on various drug trafficking and fraud-related charges.
“Criminals seek to take advantage of dire situations, and it is our job to stand in their way,” said U.S. Attorney McCoy. “I want to commend the federal agencies involved for their excellent work. In these unprecedented times, the Paycheck Protection Program has been a lifeline for businesses across the United States, and by extension the millions of Americans whose very livelihoods depend on these businesses. This office, in concert with our partners in law enforcement, will remain vigilant in its mission to protect our citizens, and we will prosecute those who seek to manipulate this essential program.”
“Taxpayer funds from the Paycheck Protection Program were supposed to keep businesses open and provide money for workers during these difficult times,” said Jody Norris, Special Agent in Charge of the Columbia Field Office of the Federal Bureau of Investigation (FBI). “These subjects allegedly schemed and stole money meant for our fellow citizens in need. The FBI will continue to work with our law enforcement partners to seek out and arrest others who commit these despicable COVID related crimes.”
“Hitting drug traffickers in their pockets is a crucial part of dismantling high-level drug distribution networks,” said Robert J. Murphy, Special Agent in Charge of the Drug Enforcement Administration (DEA) Atlanta Field Division. “Their money is their life-line and without it, their drug distribution activities could not survive. DEA and its law enforcement partners remain committed to making our communities safe.”
“During this unprecedented time in our nation, criminals are seeking opportunities to profit from programs meant to provide financial assistance to many Americans who have been impacted by this pandemic,” said Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service. “Postal Inspectors will continue to work closely with our law enforcement partners to aggressively identify and pursue those individuals that siphon funds illegally for their own personal gain. We are actively investigating to combat this fraud and hope this serves as an example to anyone plotting a similar scam.”
The indictment charges the following individuals with conspiracy to commit wire fraud and conspiracy to commit money laundering:
- Lauren Marcel Duhart, 34, of Stonecrest, Georgia;
- Joshua Bernard Smith, 39, of McDonough, Georgia;
- Steve Ronald Lewis, 43, of Snellville, Georgia;
- Christopher J. Agard, 41, of Marietta, Georgia;
- Henry Duffield, 58, of Belton, South Carolina;
- Jeremy Brandon Latourneau, 43, of Spartanburg, South Carolina; and
- Derick Keane, 43, of Spartanburg, South Carolina.
During the course of the initial OCDETF investigation, agents learned that some of the drug trafficking targets were also engaged in wire fraud and money laundering. According to the indictment unsealed today, Agard utilized his business, Wild Stylz Entertainment, LLC, to launder the proceeds of fraud schemes. As part of the scheme, Duffield, who was recruited by Lewis, allowed Agard to transfer $378,000 of fraud proceeds unrelated to PPP loans from the Wild Stylz business account to be deposited into Duffield’s business account. In return, Duffield received a portion of the proceeds. After the proceeds were deposited, Roosevelt Hunt (who has pleaded guilty to related charges), Latourneau, and Keane withdrew the funds from Duffield’s account by converting $200,000 in business checks to chips at a casino. After gambling for less than two hours, Hunt, Keane, and Latourneau cashed out from the casino and left with approximately $198,750 in cash.
According to the documents filed with the court, in May 2020, Agard submitted a fraudulent Wild Stylz PPP loan application, along with fraudulent supporting documents that made numerous false and misleading statements about Wild Stylz’s number of employees and payroll expenses. Agard received a loan of more than $395,000 and disseminated the fraudulently obtained funds to other members of the conspiracy through various means. During multiple recorded calls in early June 2020, Duhart, Lewis, Smith, and Hunt discussed the bank and wire fraud conspiracies. In one call, Lewis informed Hunt that the scheme involved fraudulent bank applications and that they needed to submit as many applications to the bank as possible by June 30th.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020, designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
This case was investigated by the FBI, DEA, U.S. Postal Inspection Service, and Small Business Association Office of Inspector General. Assistant U.S. Attorneys Sloan P. Ellis and Brandi B. Hinton of the District of South Carolina, along with Trial Attorney Siji Moore of the DOJ Criminal Division’s Fraud Section, are prosecuting the case.
The charges in these cases are only accusations of a crime, and defendants are presumed innocent unless and until proven guilty.