It is important to emphasize that shell companies are not inherently fraudulent. Many shell companies have legitimate business uses such as helping to facilitate mergers and acquisitions, holding intellectual property, or helping with wealth management and estate planning. However, the same anonymity and flexibility that makes them useful also makes them susceptible to misuse, proven during the COVID-19 pandemic when in response to the urgent need to support small businesses and keep employees on payroll, the United States Congress passed the CARES Act which provided billions of dollars in forgivable loans for small businesses. Needless to say, shell companies began to pop up left and right.
Jady Solano was a tax preparer who used his tax expertise to prepare fraudulent applications for loans available under the Paycheck Protection Program (PPP). Solano prepared the applications on behalf of customers with shell companies where, in fact, the shell companies had no operations or employees. Solano falsely claimed, however, that the companies had substantial payrolls, sometimes claiming payroll of more than $1 million annually. Solano also created false documents, including false tax forms and bank statements, to support the applications.
In total, Solano prepared 62 fraudulent applications…over and over again, embellishing and lying to steal millions from the government and ultimately, every U.S. taxpayer. Solano’s fraudulent applications resulted in more than $9.1 million in wrongful loan disbursements. None of the loans were ever repaid. Solano himself personally received nearly $1.4 million through the scheme, all of which must be repaid as restitution.
On July 28, 2025, Solano was sentenced to almost seven years in prison.
Excellent job with the COVID-19 Fraud Enforcement Task Force.
Today’s Fraud of The Day is based on article “Wilmington tax preparer gets 80 months in prison for $9.1 million COVID loan/grant scheme” published by Delaware Business News on July 28, 2025.
A Wilmington man was sentenced 80 months in federal prison in connection with a scheme that resulted in more than $9.1 million in COVID relief loans issued to more than 60 businesses across the country. None of the loans were repaid. According to court documents, Jady Solano, 43, was a tax preparer in Wilmington who prepared fraudulent applications for loans available under the Paycheck Protection Program. The program offered low-interest loans and grants for organizations that kept employees on their payroll.
Solano prepared the applications on behalf of shell companies that, in fact, had no operations or employees. Solano claimed that the companies had substantial payrolls, sometimes north of $1 million annually. Solano also created false documents, including false tax forms and bank statements, to support the applications, prosecutors stated.
