Investigations Newsletter: New York Man Pleads Guilty to PPP Loan Fraud

ArentFox Schiff
Contact

Arent Fox

On October 26, Marcus Frazier of New York pled guilty to two counts of wire fraud affecting a financial institution for his alleged role in a scheme to obtain $6.9 million in Paycheck Protection Program (“PPP”) funds designed to provide relief to small businesses during the COVID-19 pandemic.

According to the complaint, between May 2020 and April 2021, Frazier submitted at least seven PPP loan applications for his various businesses that included fraudulent information relating to the number of people employed by Frazier and the amount of payroll expenses for the businesses. In order to substantiate these false statements, Frazier allegedly submitted fake bank statements and fabricated lists of purported employees. The government alleges that Frazier also claimed that one of his companies had been in operation for about a decade when, in reality, it was registered after the onset of the COVID-19 pandemic. In total, Frazier was awarded around $2.17 million in PPP loans.  He is alleged to have used these funds on personal expenses, including over $120,000 on hotels and approximately $17,000 on the ride-hailing app Uber.

Each of the two counts Frazier pled guilty to carries a maximum sentence of 30 years. He is scheduled to be sentenced on March 1, 2022.

A copy of the DOJ’s press release can be found here.

Former Georgetown Tennis Coach Accepts Plea in Varsity Blues Case

Gordon Ernst, the former head of Georgetown University’s tennis program, pled guilty to one count of conspiracy to commit federal programs bribery, three counts of federal programs bribery, and one count of filing a false tax return for his alleged role in the “Varsity Blues” college admissions scandal. Specifically, Ernst is alleged to have solicited and received bribe payments from William “Rick” Singer, the scheme’s mastermind, and families of prospective Georgetown applicants to facilitate their admission to the university as student athletes. Ernst also allegedly coordinated bribes on his own without Singer’s involvement.

According to the government, Ernst accepted more than $3 million in bribes to help admit about 19 students to Georgetown University. Ernst is alleged to have vouched for many of these students to be admitted as tennis recruits, even though they did not play the sport at a Division I level.

According to the plea agreement, prosecutors agreed to recommend a prison sentence not greater than four years, and Ernst agreed not to seek a sentence of less than one year. Sentencing has been scheduled for March 2, 2022. 

The DOJ’s press release can be found here.

Drug Money Launderer Sentenced to 15 Years Imprisonment

Xizhi Li, a US citizen and alleged leader of a money laundering operation, was sentenced to 15 years imprisonment for his role in a scheme to launder at least $30 million on behalf of foreign drug trafficking organizations. Li also agreed to forfeit $10 million to the United States.

Li and his coconspirators are alleged to have agreed with drug traffickers to move money through foreign and domestic casinos, front companies, and bank accounts that were sometimes opened using fictitious identities. According to the government, Li engaged in “mirror transactions,” where two nearly simultaneous transactions occur, to hide the source of funds. Li is alleged to have interacted directly with members of drug trafficking organizations and received commissions in exchange for laundering funds.

Li is one of six coconspirators that were indicted in November 2019 as part of the scheme. One coconspirator, Tao Liu, was sentenced to seven years in August 2021 for his role. 

A copy of the DOJ’s press release can be found here.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© ArentFox Schiff | Attorney Advertising

Written by:

ArentFox Schiff
Contact
more
less

ArentFox Schiff on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.