Charleston man pleads guilty to COVID-19 relief fraud scheme | USAO-SDWV
CHARLESTON, W.Va. — A Charleston man pleaded guilty today to wire fraud, admitting to a scheme to defraud the Paycheck Protection Program (PPP) of more than $41,666 in COVID-19 relief loans. 19 guaranteed by the Small Business Administration (SBA) under the CARES Act (Coronavirus Aid, Relief, and Economic Security).
According to court documents and statements made in court, Malik Breckenridge, 26, of Charleston, applied for and obtained two PPP loans on behalf of his alleged business, Malik Breck, between April 4, 2021 and August 10, 2021. Malik Breck was not a registered business entity in West Virginia and was not engaged in substantial and legitimate business activity on or before February 15, 2020. Breckenridge admitted to falsely stating that Malik Breck was established in 2014 and was operating on February 15, 2020. Breckenridge further admitted that he submitted a false Internal Revenue Service (IRS) Form 1040, Schedule C Profit or Loss from Business, indicating that Malik Breck earned $180,489 in gross income in 2019.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to millions of Americans suffering from the economic effects caused by the COVID-19 pandemic. One of the sources of relief provided by the CARES Act was the authorization of repayable loans to small businesses for the maintenance of employment and certain approved expenses, through the PPP. Businesses must use PPP loan proceeds for payroll costs, mortgage interest, rent and utilities.
A Florida lender processed Breckenridge’s two PPP loan applications. Each loan totaled $20,833. Breckenridge admitted that he then requested cancellation of the two PPP loans even though he had not spent the loan proceeds on authorized business expenses. The SBA forgave the loans on August 8, 2021.
“This is the first conviction for fraud related to COVID-19 in the Southern District of West Virginia, and unfortunately, it likely won’t be the last,” U.S. Attorney Will Thompson said. “P3 funds have offered a lifeline to small businesses during the pandemic, and this office is determined to hold accountable those who undermine these necessary programs through fraud and abuse. This office will continue to prosecute those who take advantage of government programs designed to help those who are suffering. »
Thompson praised the West Virginia State Police and the United States Secret Service for their investigative work in the case.
Breckenridge is due Nov. 17, 2022, and faces a maximum sentence of 20 years in prison, three years of supervised release and a $250,000 fine. Breckenridge also agrees that he owes $41,666 in restitution.
United States District Judge Irene C. Berger presided over the hearing. Assistant United States Attorney Kathleen Robeson is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to mobilize Department of Justice resources in partnership with government agencies to scale up enforcement and prevention efforts. pandemic-related fraud. The task force strengthens efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies administering relief programs to prevent fraud, among other methods, by increasing and integrating coordination mechanisms existing ones, identifying resources and techniques to uncover fraudulent actors and their agendas, and sharing and leveraging information and knowledge gained from previous enforcement efforts. For more information about the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about alleged attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) hotline at 866-720-5721 or via NCDF’s online complaint form at: https://www. .justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
A copy of this press release can be found on the website of the US Attorney’s Office for the Southern District of West Virginia. Court documents and related information can be found on PACER by searching for case #2: 22-cr-84.