DOJ Brings Charges Over CARES Act Fraud

The Office of Public Affairs at the Department of Justice issued a press release on Tuesday detailing criminal charges they had brought against three individuals in the District of Idaho. The charges allege that the defendants engaged in fraud to gain relief funding under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The indictments were separate but all alleged that the defendants, Khadijah Chapman, Daniel Labrum, and Eric O’Neil, fraudulently obtained and misused loans from the Paycheck Protection Program, or PPP. The PPP specializes in providing small businesses with funding that will pay their benefits, payroll costs, and more for up to 8 weeks.

The complaint asserted that the defendants allegedly “falsified information and submitted fraudulent documents to collectively obtain over $2.4 million in relief funding guaranteed by the Small Business Administration (SBA) under the Coronavirus Relief, Aid, and Economic Security (CARES) Act for small businesses struggling with the economic impact of COVID-19.”

Chapman and O’Neil were charged with one count of bank fraud each, while defendant Labrum was charged with five individual counts of bank fraud and one count of engaging in monetary transaction with criminally derived proceeds. Each count of bank fraud can carry a maximum penalty of 30 years in prison. Labrum’s additional count of engaging in monetary transactions with criminally derived proceeds carries a 10 year maximum sentence.