A couple was sentenced to prison for their participation in a scheme to file four fraudulent loan applications seeking more than $1.1 million in forgivable Paycheck Protection Program (PPP), and Economic Injury Disaster Loans (EIDL) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security Act.
Latoya Stanley, 38, and Johnny Philus, 33, both of Miami, Florida were sentenced to 18 and 30 months in prison, respectively. They each pleaded guilty to one count of conspiracy to commit wire fraud on March 8. As outlined in court documents, in Stanley’s PPP application, she claimed to employ 18 individuals from her company, Dream Gurl Beauty Supply LLC. Philus, meanwhile, stated that he employed 29 individuals at his company, Elegance Auto Boutique LLC. In actuality, Stanley and Philus did not employ anyone at their respective companies.
According to court documents, in her EIDL application, Stanley claimed to generate over $800,000 in income and to employ five individuals from a farm-based in the yard of her Miami home. In his EIDL application, Philus claimed to generate $400,000 in income and to employ 10 individuals from a farm located in the yard of a small residential home. But, in reality, Stanley and Philus employed no one, and the farms did not exist.
As they admitted in their plea agreements, Stanley and Philus worked together to effectuate the fraud and ultimately received over $1 million in funds from the fraudulent PPP and EIDL applications before their schemes were uncovered.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Juan Antonio “Tony” Gonzalez of the Southern District of Florida; Treasury Inspector General for Tax Administration (TIGTA) J. Russell George; Inspector General Hannibal “Mike” Ware of the SBA’s Office of Inspector General; and Inspector in Charge Joseph Cronin of the U.S. Postal Inspection Service Miami Division made the announcement.
This case was investigated by the SBA-OIG, USPIS, and TIGTA.
Trial Attorney Louis Manzo of the Criminal Division’s Fraud Section is prosecuting the case.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.