Paycheck Protection Program Fraud Defendants Convicted Following Jury Trial

ATLANTA – Teldrin Foster and Carla Jackson were found guilty by a jury for their roles in schemes to steal Paycheck Protection Program (“PPP”) funds during the COVID-19 pandemic. Foster was charged with 14 counts of wire fraud, six counts of bank fraud, 14 counts of conspiracy to commit wire and bank fraud, six counts of making a false statement to a federally insured financial institution, and one count of money laundering. Jackson was charged with two counts of money laundering. After a seven-day trial, both defendants were convicted on all counts. Foster and Jackson were charged in a 16-defendant indictment containing 63 felony counts, alleging numerous conspiracies among defendants. This indictment is part of a wide-ranging investigation into PPP fund theft that has resulted in the convictions of 23 of 24 defendants charged during the investigation. A final defendant’s case remains pending.

“These defendants brazenly stole pandemic relief funds intended for struggling small businesses during the COVID-19 pandemic,” said United States Attorney Ryan K Buchanan. “This investigation has produced charges against 24 defendants and secured guilty verdicts by a jury of the only two defendants to proceed to trial thus far. This successful prosecution is the culmination of a comprehensive collaboration between multiple federal agencies and our office that demonstrates our collective commitment to comprehensively investigating and prosecuting criminals who stole pandemic relief funds.”

“Foster and Jackson’s actions affected every tax paying citizen in this country and took away from government funds that were intended to provide relief to small businesses and employees who desperately needed it during the pandemic,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “These convictions reiterate the message that the FBI and our federal partners remain vigilant prosecuting people who misuse government funds for their own personal greed.”

“IRS Criminal Investigation special agents and our law enforcement partners will continue investigating and bring to justice those who committed fraud on the Paycheck Protection Program,” said Demetrius Hardeman, Acting Special Agent in Charge, Internal Revenue Service-Criminal Investigation, Atlanta Field Office.

According to U.S. Attorney Buchanan, a second superseding indictment, and other information presented in court: from April 2020 through August 2020, Teldrin Foster worked with co-defendant Darrell Thomas and others to fraudulently obtain at least 14 fraudulent loans. Each of the businesses obtained a PPP loan between $700,000 and $850,000, for a total of over $11.1 million. The loan applications certified that each applicant business was in operation on February 15, 2020 and had employees for whom it paid salaries and payroll taxes or paid independent contractors; that the funds would be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments; and that the information provided in the applications and in all supporting documents and forms were true and accurate in all material respects.

The PPP loan applications reported that each business had between 59 and 69 employees and approximately $295,000 to $342,000 in average monthly payroll expenses. To support these payroll figures, each business’s loan application was accompanied by an Internal Revenue Service Form 941, which employers use to report payroll taxes, for each quarter of 2019 and by a bank statement or a spreadsheet reflecting payroll expenses. But none of the businesses had employees or payroll expenses. The Form 941s, bank statements, and W2 payroll spreadsheets had all been fabricated. Indeed, some of the supporting documents the businesses submitted were substantively identical, including identical Form 941s, identical bank statements, and W2 payroll spreadsheets where the reported figures were identical and only the purported employee names changed. 

To conceal and launder the stolen funds, PPP funds were sometimes disguised by the defendants. Jackson acted as a money launderer, receiving more than $300,000 of the stolen PPP funds into her business’s bank account. The funds were transferred through two transactions, a check in the amount of $155,252.50 and a wire transfer in the amount of $179,985.72. The check falsely claimed that the funds were being provided to Jackson as consulting fees and daily business management, and the wire transfer paperwork falsely stated that the funds were for payroll services. In reality, Jackson was just trying to prevent the detection of funds obtained from the PPP program and seizure of those proceeds by federal law enforcement.

This case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, the U.S. Treasury Inspector General for Tax Administration, and the Small Business Administration-Office of the Inspector General.

Assistant U.S. Attorneys Tal Chaiken, Samir Kaushal, and Nathan Kitchens of the Northern District of Georgia and Trial Attorney Siji Moore of the Criminal Division’s Fraud Section are prosecuting the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.    

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6280. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.