2 Florida men guilty of running $35M COVID-19 fraud scheme

AKRON, Ohio – Two South Florida men person pleaded blameworthy successful Ohio to starring a nationwide strategy to fraudulently get much than $35 cardinal successful COVID-19 alleviation loans.

James Stote, 55, of Hollywood, Florida, and Phillip Augustin, 52, of Coral Springs, Florida, pleaded blameworthy Tuesday successful Akron, Ohio, national tribunal to conspiracy to perpetrate ligament fraud, according to tribunal records. They each look up to 20 years successful prison.

“While galore businesses successful our communities relied upon alleviation funds to support their doors unfastened and employees paid, these defendants profited disconnected a strategy that stole millions of payer dollars intended for struggling businesses and spent it lavishly connected themselves,” First Assistant U.S. Attorney Michelle M. Baeppler for the Northern District of Ohio said successful a statement.

According to tribunal documents, Stote and Augustin led a radical that fraudulently obtained Paycheck Protection Program loans guaranteed by the Small Business Administration nether the Coronavirus Aid, Relief and Economic Security Act. Authoriteis accidental they initially obtained a fraudulent indebtedness for Augustin’s company, Clear Vision Music Group LLC, utilizing falsified documents. After that, they instantly began moving to get larger PPP loans for themselves and their associates, the documents added.

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Stote and Augustin recruited further PPP indebtedness applicants and prepared and submitted fraudulent indebtedness applications for them successful speech for a stock of the indebtedness proceeds, prosecutors said. The applications they submitted for each of the loans successful the strategy relied connected fake payroll numbers, falsified IRS forms and phony slope statements. Prosecutors said they submitted oregon facilitated astatine slightest 79 fraudulent indebtedness applications worthy astatine slightest $35 cardinal and planned to taxable more.

As portion of the aforesaid scheme, Diamond Smith, 37, of Miramar, Florida, was sentenced Thursday to 1 twelvemonth and 8 months aft pleading blameworthy successful August successful South Florida to conspiracy to perpetrate ligament fraud. Smith, a signaling artist, obtained 2 PPP loans, for $426,717 and $708,065, and paid much than $250,000 to Stote and Augustin arsenic kickbacks for their assistance successful preparing and submitting the fraudulent indebtedness applications, officials said.

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A full of 25 radical person been charged successful Ohio, Florida and North Carolina for their information successful this scheme, with 20 convictions, truthful far, according to authorities.

The Paycheck Protection Program represents billions of dollars successful forgivable tiny concern loans for Americans struggling due to the fact that of the COVID-19 pandemic. It’s portion of the Coronavirus Aid, Relief and Economic Security Act, which became national instrumentality successful March 2020.

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