It has been already discussed how pandemic fraud is shaping up to be the biggest scam in U.S. history. Of the $5 trillion in relief, 20 % is estimated to have gone to fraudsters. And the COVID-19 Fraud Enforcement Task Force has built a comprehensive program to find them. As a result, convictions in pandemic fraud, like Toni A Smith and Dontae Antonio Murphy, are becoming a regular occurrence in U.S. Courts. Owners of janitorial and cleaning services companies, Smith and Murphy conspired with other fraudsters in a nation-wide scheme to help people across the country commit millions of dollars in a fraudster favorite, the Paycheck Protection Program and Economic Injury Disaster Loans.
Smith and Murphy created fraudulent supporting documents and applications in order to obtain fraudulent PPP loans.The fraudulent applications grossly inflated the number of employees and wages being paid prior to the COVID-19 pandemic by backdating fraudulent IRS forms. Following the disbursement of the PPP loans, Smith and Murphy fraudulently manipulated the fraudulently obtained loans to appear like they were paid out to employees. The fraudulent payroll records were then submitted to the Small Business Administration (SBA) to obtain 100% loan forgiveness. In reality, these fraudulently received proceeds were only used for personal use. Making a clean sweep of the U.S. taxpayers dollars.
On August 21, 2024, Smith was sentenced to 15 months in prison and Murphy was sentenced to 12 months in prison. They were also ordered to pay full restitution with interest and processing fees to the Small Business Administration.
Great job by the COVID-19 Fraud Enforcement Task Force in this case.
Today’s Fraud of The Day is based on article “New Jersey Resident Sentenced to Over a Year in Prison for COVID-19 Fraud” published by Shore News Network on August 21, 2024.
Two more defendants have been sentenced in connection with a national COVID-19 fraud scheme, bringing the total number of sentenced individuals to 22. Toni A. Smith, 46, of New Jersey, received a 15-month prison sentence, while Dontae Antonio Murphy, 40, of Charlotte, was sentenced to 12 months in prison. Both were also ordered to pay several hundred thousand dollars in restitution to the Small Business Administration (SBA), which includes interest and processing fees, for fraudulently obtaining Paycheck Protection Program (PPP) loans.
Smith and Murphy secured fraudulent PPP loans under the guise of running janitorial and cleaning service companies. This sentencing marks the latest development in a broad investigation that has led to nine additional guilty pleas in the Eastern District of North Carolina, with those defendants still awaiting sentencing.
