ATLANTA – Teldrin Foster, John Gaines, and Carla Jackson have been sentenced for their roles in a scheme to steal Paycheck Protection Program (PPP) funds during the COVID-19 pandemic. To date, a total of 23 individuals have been convicted and sentenced in connection with the fraudulent scheme.
“Foster, Gaines, and Jackson, together with 20 other defendants who have already been sentenced for their participation in this criminal scheme, took advantage of a relief program designed to keep small businesses afloat during the COVID-19 pandemic,” said U.S. Attorney Ryan K Buchanan. “These defendants have been held accountable for depriving this program of funds desperately needed by some of the most vulnerable in our society. And their sentences send a clear message that fraud against the government will not be tolerated.”
“COVID-19 disaster relief loans were issued by the government to help businesses struggling to survive during a pandemic, not to use for personal pleasures like these defendants used them for,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “The FBI will continue to hold accountable those who abused taxpayer dollars and diverted them from citizens who desperately needed them.”
“Those who took advantage of the COVID-19 pandemic relief programs are realizing from these sentences that even after four years since Congress enacted them, they are still being held accountable,” said Demetrius Hardeman, Special Agent in Charge, IRS Criminal Investigation, Atlanta Field Office. “IRS Criminal Investigation special agents will continue investigating and forwarding for prosecution to the U.S. Attorney’s Office those who committed fraud against the government.”
According to U.S. Attorney Buchanan, the second superseding indictment and other information presented in court: From April 2020 through August 2020, Foster worked with co-defendant Darrell Thomas and others to fraudulently obtain at least 14 loans. Each business obtained a PPP loan between $700,000 and $850,000 for a total of over $11 million. The loan applications certified that each applicant’s business was operational on February 15, 2020; had employees for whom it paid salaries and payroll taxes or paid independent contractors; would use funds to retain workers and maintain payroll or make mortgage interest payments; lease payments; utility payments; and provided true and accurate information.
The PPP loan applications reported that each business maintained between 59 and 69 employees and generated approximately $295,000 to $342,000 in average monthly payroll expenses. To support these figures, each application included an Internal Revenue Service Form 941 for each quarter of 2019 along with bank statements or spreadsheets reflecting payroll expenses. In fact, none of these businesses had employees or incurred payroll expenses as claimed. The Form 941s, bank statements, and W2 payroll spreadsheets were fabricated.
Gaines worked with Thomas and others to obtain a fraudulent PPP loan amounting to $806,710 for Gaines Reservation and Travel—a business without employees or payroll expenses. To support this application Gaines provided Thomas with fabricated bank statements reflecting fake payroll deductions. After approval of the loan funds were deposited into an account controlled by Gaines who later directed payments disguised as rent and payroll expenses.
Jackson laundered some proceeds from Gaines Reservation's PPP loan receiving over $300,000 into her business’s account via check ($15525250) claiming consulting fees/daily management services wire transfer ($17998572) claiming payroll services assisting Gaines concealing stolen funds detection/seizure federal law enforcement.
U.S District Judge Jean-Paul "J.P." Boulee sentenced:
- Teldrin Foster (42), Atlanta GA: 10 years one month prison followed three years supervised release ordered restitution amounting $9606627 convicted February jury six counts conspiracy commit bank/wire fraud eight counts conspiracy commit wire fraud six counts bank fraud fourteen counts wire fraud six counts making false statements federally insured financial institution one count money laundering.
- John Gaines (59), Marietta GA: five years three months prison followed three years supervised release ordered restitution amounting $806710 pleaded guilty January one count money laundering.
- Carla Jackson (56), Tucker GA: three years prison followed two years supervised release ordered restitution amounting $335238 convicted February jury two counts money laundering.
To date total twenty-four individuals charged connection fraudulent scheme twenty pleaded guilty/sentenced while one defendant’s charges remain pending investigated Federal Bureau Investigation/Internal Revenue Service Criminal Investigation prosecuted Assistant US Attorneys Tal Chaiken Samir Kaushal Nathan Kitchens Norman Barnett Northern District Georgia Trial Attorney Siji Moore Criminal Division Fraud Section.
On May 17th 2021 Attorney General established COVID-19 Fraud Enforcement Task Force marshal resources Department Justice partnership agencies across government enhance efforts combat/prevent pandemic-related fraud bolstering efforts investigate/prosecute most culpable domestic/international criminal actors assisting agencies tasked administering relief programs prevent fraud augmenting/incorporating existing coordination mechanisms identifying resources/techniques uncover fraudulent actors/schemes sharing/harnessing information/insights gained prior enforcement efforts more information Department response pandemic visit https://www.justice.gov/coronavirus
Anyone information allegations attempted fraud involving COVID-19 report calling Department Justice National Center Disaster Fraud NCDF Hotline at (866)7205721 via NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
For further information contact US Attorney Public Affairs Office USAGAN.PressEmails@usdoj.gov (404)5816016 Internet address US Attorney Office Northern District Georgia http://www.justice.gov/usao-ndga