Nine Individuals Charged in $24 Million Paycheck Protection Program Fraud Scheme 

Nine Individuals Charged in $24 Million Paycheck Protection Program Fraud Scheme 

In one of the largest COVID-relief fraud cases to date, nine Ohio and Florida individuals are alleged to have conspired to obtain fraudulent PPP loans guaranteed by the CARES Act and to have received kickbacks for filing fraudulent loan applications.
 
In federal criminal complaints filed in the Northern District of Ohio and the Southern District of Florida, the nine individuals were charged with a combination of bank fraud, wire fraud, conspiracy to commit bank and wire fraud, and obstruction for conspiring to obtain fraudulent PPP loans and receiving kickbacks for filing fraudulent PPP loan applications. The nine individuals are: (1) Wyleia Nashon Williams of Ft. Lauderdale, Florida; (2) Phillip J. Augustin of Coral Springs, Florida; (3) Damion O. Mckenzie of Miami Gardens, Florida; (4) Andre M. Clark of Miramar, Florida; (5) Keyaira Bostic of Pembroke Pines, Florida; (6) James R. Stote of Hollywood, Florida; (7) Ross Charno of Ft. Lauderdale, Florida; (8) Deon D. Levy of Bedford, Ohio; and (9) Abdul-Azeem Levy of Cleveland, Ohio.
 
Augustin, the owner of Clear Vision Music Group LLC (“Clear Vision”), a Florida talent management company, is alleged to have obtained a fraudulent PPP loan for Clear Vision. Augustin allegedly recruited Williams and the two began seeking larger PPP loans for Augustin’s associates by submitting fake payroll numbers and bank statements, falsified IRS forms, and counterfeit checks. Augustin is then alleged to have used his network of business contacts from his work as a manager of professional athletes to recruit others to submit false PPP applications and then pressure them to send him kickbacks once PPP funds were received. McKenzie, Clark, and Bostic are also alleged to have recruited others to submit PPP loan applications in exchange for a share of the loan proceeds.
 
Investigators identified more than $2.3 million in kickback wire transfers from entities or their owners that obtained PPP loans, with Augustin receiving more than $900,000 in a six-week period. According to the complaint, at least 90 fraudulent loan applications were created seeking more than $24 million dollars. Most of these loan applications were submitted, and 42 loans totaling $17.4 million were approved and funded.
 
Read the USAO’s press release here and DOJ’s press releases here.

Five Small Business Owners Charged for $4 Million COVID-Relief Fraud

Five small business owners were indicted for their alleged participation in a scheme to fraudulently obtain nearly $4.1 million in PPP loans and then use some of those funds for luxury purchases. An indictment filed in the Northern District of Georgia charges Darrell Thomas of Johns Creek, Georgia; Andre Lee Gaines of Dallas, Georgia; Kahlil Gibran Green Sr. of Cleveland, Ohio; and Bern Benoit of Burbank, California with bank fraud, wire fraud, conspiracy to commit bank and wire fraud, making false statements to a financial institution, and money laundering. Carla Jackson of Tucker, Georgia was also charged with money laundering for her role in the scheme.

The government alleges that Thomas, Gaines, Green, and Benoit submitted PPP loans on behalf of five businesses, Bellator Phront Group Inc. (owned by Thomas), Gaines Reservation and Travel LLC (owned by Gaines), Impact Creations LLC (owned by Green), Transportation Management Services, Inc. (owned by Benoit), and Lee Operations LLC, seeking $800,000 for each entity. These PPP loan applications are alleged to have contained false and misleading statements regarding the number of employees at each business and amount of payroll expenses.

The government has alleged that the funds were not used for any authorized purpose but instead luxury purchases and various personal expenses and withdrawals. For example, Thomas is alleged to have purchased a 2018 Mercedes-Benz S-Class and a 2018 Land Rover Range Rover, each worth approximately $125,000, and Jackson is alleged to have used the funds to make payments on two automobile loans. The government has seized Thomas’ Range Rover, jewelry, over $120,000 in cash, and over $3 million from ten different bank accounts.

Read the USAO’s press release here and DOJ’s press release here.

Anesthesiologist Sentenced to 5 1/2 Years in Prison and Ordered to Pay $82 Million

Richard Ferdinand Toussaint Jr., the co-founder of now-defunct Forest Park Medical Center in Dallas, Texas, was sentenced to 66 months in federal prison on Monday and ordered to pay $82.6 million in restitution after he pled guilty to one count of conspiracy to pay health care bribes and kickbacks and one count of illegal remuneration under the Travel Act for his participation in a kickback scheme. Dr. Toussaint’s sentence will run concurrently with a 41-month sentence he is already serving in federal prison for his involvement in a separate health care fraud case.

According to DOJ’s press release, in 2008, Dr. Toussaint and another co-defendant, Dr. Wade Neal Barker, a bariatric surgeon, launched Forest Park Medical Center, a hospital for bariatric and spinal surgery patients. Dr. Toussaint, Dr. Barker, Forest Park’s hospital manager, Alan Andrew Beauchamp, and their colleagues paid surgeons to refer patients with high-reimbursing, out-of-network, private insurance to Forest Park. Dr. Toussaint and his co-conspirators are alleged to have paid out more than $40 million in kickbacks that were disguised as “marketing money” or consulting fees.

Read DOJ’s press release here.

Texas Dentist Ordered to Pay $16.5 Million in Medicaid Fraud Case

On Monday, a Texas state judge ruled that Dr. Richard Malouf owes more than $16.5 million and interest after finding earlier this year that Dr. Malouf was liable for 1,842 unlawful acts concerning billing practices under the Texas Medicaid Fraud Prevention Act. According to the Attorney General of Texas’s press release, the Court previously found that Dr. Malouf, who operated orthodontics clinics in and around Dallas, fraudulently billed Medicaid for services he did not deliver.

Read the Attorney General of Texas’s press release here.