Indictment: 11 Omahans abused ‘lifeline’ for small businesses to the tune of $2.4 million | Crime-and-courts

The network was extensive.

Eleven different Omahans applied for, and obtained, $2.4 million in federal CARES Act money that they used for anything but the payroll assistance and economic boost it was designed to provide. One of them served as a sort of government-grant godfather, doling out advice on how to “rip off” the Paycheck Protection Program, U.S. Attorney Jan Sharp said Wednesday.

The grants were designed to keep businesses afloat and workers employed during the coronavirus pandemic. But, Sharp alleges, these people had designs on using the money to enrich themselves.

In some cases, Sharp said, the purported businesses were pure fiction, complete with phony personnel and a false payroll.

“All done to gain access to this lifeline Congress had thrown at businesses,” Sharp said.

Nine defendants were arrested Wednesday in Omaha, one in Las Vegas and one in Atlanta. They are scheduled to make their first appearances in federal court in the next few days.

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The U.S. Attorney’s Office identified them as: Ramel D. Thompson, 58; Carl Estwick, 59; Jackie Harper, 49; Tarysh G. Hogue, 48; Richard L. Kelly, 59; Lenfield Kendrick, 49, who also resides in Minnesota; Trevor A. McNeil, 23, who also lives part time in Atlanta; Henry T. Lewis, 54; Shawn A. Prater, 47; and the father-son duo of Michael A. Perkins Sr. and Jr.

Altogether, they face 22 charges. All are charged with at least one count of conspiracy to commit wire fraud and one count of wire fraud. Some are accused of money laundering in addition to the fraud charges. If convicted, they could face up to 20 years in prison on each count.

Sharp and Eugene Kowel, special agent in charge of the Omaha FBI office, alleged that the 11 filed 59 fraudulent applications to try to obtain $7.6 million in grants from PPP and a second program, the Economic Injury Disaster Loan. They succeeded in getting $2.4 million.

Sharp cast Thompson as a go-to guy. The indictment says he advised others — as many as five, according to Sharp — on how to “fraudulently obtain funds (and) prepared false applications and false supporting documents on behalf of other participants.”

In some cases, the defendants’ “businesses” didn’t even exist, except on paper. In other cases, their representation of their revenue or payroll didn’t seem to pass the eyeball test.

The indictment alleges McNeil represented that, on average, each of the 10 employees of his cleaning company made $91,200 a year. Kelly said each of his employees made the same amount — $91,200 a year — as auto detailers.

Kelly also represented that his auto-detailing business generated $1 million in revenue a year but netted a profit of just $31,902, the indictment alleges.

Asked whether banks and other lenders should have sensed something amiss just by those numbers, Sharp said the program was, by nature, designed to distribute money quickly so that businesses could stay afloat.

“To the extent that you’re asking if there were checks and balances, we’re kind of the checks and balances,” Sharp said of federal agents and prosecutors. “There’s a downside to getting caught doing that. Could (the program) have been done differently? That’s a political question and that’s not something I’m competent to answer.”

Kowel said federal agents are in the process of trying to seize assets. So far they’ve recovered $64,000 in cash, $96,000 from a bank account, Estwick’s 2006 Bentley; Lewis’ 2013 Chevy Silverado; a house Prater bought for $24,345 and two dump trucks purchased by the Perkins business for $164,000 each.

Sharp said prosecutors will continue to try, but there’s no way they’ll recover the $2.4 million.

“Not anything that’s close,” he said.

Sharp said this indictment is the largest of a handful of recent cases in which prosecutors have alleged theft of federal COVID-19 relief funds. Last week, a nonprofit business owner and Omaha Learning Community candidate, Brenda Banks, was accused of fraudulently obtaining $202,000 in federal loans. She denies she misused the money.

“This was designed to stabilize businesses,” Sharp said. “This was not and was never intended to be free money.”

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