NC man charged with PPP loan fraud, allegedly seeking $414k using bogus docs

Fraudulently seeking more than $414,000 in loans from the program that aims to help small businesses deal with the financial impact of the coronavirus crisis has earned a North Carolina man federal charges of wire and bank fraud, federal law enforcement said this week.

According to the U.S. Attorney for the Middle District of North Carolina, David Christopher Redfern, 31, of Trinity, N.C., was charged by criminal complaint filed with one count of wire fraud and one count of bank fraud.

Federal prosecutors (assisted by the Federal Deposit Insurance Corp.’s Office of General Counsel) alleged that Redfern, through a company called Wilder Effects LLC (Wilder Effects) that he formed in January 2020, fraudulently applied for two Economic Injury Disaster Loan (EIDL) loans as well as a loan through the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) between April and June of this year.

The PPP loan application, federal law enforcement alleged, was supported by falsified documents. The false documentation, they charged, included a fake IRS filing that purported to be Wilder Effects’ Employer’s Quarterly Federal Tax Return for the first quarter of 2020, showing that the company paid wages to 20 employees, when in reality the IRS has no record of such a filing.

The complaint further alleges that the EIDL and PPP loan proceeds were withdrawn in cash or transferred to Redfern’s personal bank account.  As a result of suspected fraud alerts, Wilder Effects’ bank account was frozen and approximately $402,000 of the more than $414,000 in EIDL and PPP loan proceeds were recovered.

The complaint against Redfern were unsealed Aug. 25; he was arrested and appeared before a federal court that same day.

North Carolina Man Charged with COVID-19 Relief Fraud