Pair arrested for $4M in CARES Act fraud scheme

HOUSTON – Two individuals have been arrested following the return of an indictment alleging conspiracy to commit and committing wire fraud, announced U.S. Attorney Jennifer B. Lowery.

Law enforcement took Felicia Garza, 36, into custody at her home in Houston. She is expected to make her initial appearance before U.S. Magistrate Judge Cynthia Y. Ho tomorrow at 2 p.m. 

Dylan Kinlock, 29, Orlando, Florida was arrested at his home March 30.

The seven-count indictment alleges Garza and Kinlock devised a scheme to solicit others to fraudulently apply for Paycheck Protection Program (PPP) loans the Coronavirus Aid, Relief, and Economic Security (CARES) Act provided. The two allegedly utilized victims’ personal information to create falsified documents and apply for a PPP loan on their behalf.

The false documents allegedly included fictitious Schedule C tax forms reporting profit or loss from a business, 1099-MISC forms and invoices reporting incorrect income to qualify for the loans, according to the charges. Kinlock allegedly solicited each of his victims to execute a contract with him in which they agreed to share a portion of their PPP loans.

The indictment alleges Kinlock participated in at least 241 fraudulent PPP loan applications resulting in the distribution of approximately $4,844,274 of CARES Act money. The indictment alleges Kinlock pocketed nearly $939,379 from the victims for whom he assisted in securing the defrauded PPP loans, according to the charges.

If convicted, Kinlock and Garza face up to 20 years in federal prison and a $250,000 maximum fine.

IRS-Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Kate Suh and Jay Hileman are prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.