Three people have been charged in relation to their alleged roles in a fraud scheme related to the COVID-19 Payment Protection Program.
All three were U.S. Postal Service employees at the time of the alleged fraud, according to a news release from the U.S. Attorney’s Office for the District of South Carolina.
The scheme involved as many as 400 fraudulent PPP loan applications, the majority of which were for applicants in South Carolina, according to the release. The indictment alleges the scheme resulted in more than $1 million in fraudulently obtained PPP loans, and according to evidence presented at the defendants’ bond hearing, that figure may be as high as $8 million.
The defendants are Tiffany McFadden, 40, a former U.S. Postal Service employee from Brooklyn, N.Y., and Port St. Lucie, Fla.; Cherry Lewis, 43, of Johnsonville in Florence County and Keisha Lewis, 33, of Hemingway in Williamsburg County.
The indictment alleges that the defendants were part of a national scheme, led by McFadden, that fraudulently acquired PPP loans, the release said. The PPP loan program was administered by the Small Business Administration (SBA) and provided forgivable loans to small businesses for job retention and certain other expenses during and resulting from the COVID-19 pandemic.
McFadden, according to the indictment, created false and fraudulent PPP loan applications by obtaining the personal identifying information of putative loan applicants. She used that information to create tax documents and other paperwork related to non-existent businesses. McFadden then submitted that information to SBA-approved lenders, and the loan recipients received PPP loans they were not entitled to.
In exchange for her services, McFadden would receive a portion of the funds, according to the U.S. Attorney’s office. The indictment alleges that McFadden would also assist in getting the loans forgiven through the Small Business Administration.
Cherry Lewis and Keisha Lewis allegedly assisted McFadden in the scheme. They requested and received blank and fillable tax forms from McFadden, which they used to assist others in completing fraudulent PPP loan applications. The indictment further alleges that both Cherry Lewis and Keisha Lewis also personally obtained at least one fraudulently obtained PPP loan.
The defendants were arrested by the U.S. Secret Service on Jan. 6. They have since been released on bond pending trial. All three face a maximum penalty of 20 years in prison, fines and restitution.
“Any member of the public who has information related to this scheme is encouraged to contact the U.S. Secret Service,” said U.S. Attorney Adair F. Boroughs. “PPP loans were intended to help businesses survive unprecedented challenges. Every dollar stolen from this program was stolen from taxpayers and legitimate businesses in need of support. This office takes pandemic-related crime seriously and stands ready to prosecute such fraud in all its forms.”
Any member of the public who has information related to this scheme is encouraged to contact the Columbia, South Carolina, field office of the U.S. Secret Service at (803) 772-4015.
The case was investigated by the U.S. Secret Service, with assistance from the U.S. Postal Inspection Service, the Small Business Administration, the Florence County Sheriff's Office, and the Williamsburg County Sheriff's Office. Assistant U.S. Attorneys Elliott B. Daniels and Winston Marosek, who also serves as the Office’s Coronavirus Fraud Coordinator, are prosecuting the case.