Five who sought $1.1 million+ in COVID-relief loans charged with bank fraud, money laundering

Five individuals – three from Milwaukee, Wis., and two from Chicago – have been indicted for their alleged participation in a scheme to file fraudulent loan applications seeking more than $1.1 million in forgivable Paycheck Protection Program (PPP) loans available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

A release circulated Friday by the Federal Deposit Insurance Corp. (FDIC) Office of Inspector General (OIG), which aided in the investigation of this case, said that Thomas Smith, Stephen Smith, and Robert Hamilton, all of Milwaukee, Wis., and Samuel Davis, Jr., and Jonathan Henley, of Chicago, were charged in an indictment filed in the Eastern District of Wisconsin with bank fraud and money laundering.

The indictment alleges that the defendants submitted several fraudulent PPP loan applications to a federally insured financial institution and the Small Business Administration (SBA, which runs the PPP) in the names of businesses with no actual operations or employees. The defendants allegedly misrepresented the number of employees and payroll expenses in their applications and submitted fake tax documents, according to the release.

The release reminds that an indictment is merely an allegation and all defendants are presumed innocent until proven guilty.

Five Charged in Connection With COVID-Relief Fraud Scheme