Ten suspects, including five Atlanta residents, have been indicted for their alleged roles in a larger multi-state scheme to defraud the federal government’s COVID-19 relief loans program for more than $700,000, the U.S. attorney’s office announced.
According to a news release, the suspects are allegedly part of a larger multistate scheme to submit fraudulent loan applications on behalf of nonexistent businesses as part of the Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP).
The suspects are: Atlanta residents James McFarland, 56; Tranesha Quarterman, 33; Darryl Washington, 66; Adarin Jones (a/k/a Adrian Jones), 42; and Katie Quarterman, 28; plus Alicia Quarterman, 38, of Fayetteville; Katrina Lawson, 41, of Houston; India Middleton, 34, of Accokeek, Maryland; Nikia Wakefield, 42, of Rockville, Maryland; and Victor Montgomery, 43, of Washington.
“The impact of COVID-19 on small businesses around the country has been devastating,” acting U.S. Attorney Kurt R. Erskine said in the release. “The defendants allegedly abused both programs by submitting fraudulent applications and obtaining thousands of dollars that should have gone to support struggling businesses. We will work tirelessly to protect the integrity of the EIDL and PPP and to help small businesses stay afloat.”
Tommy D. Coke, postal inspector in charge of the Atlanta division, added, “The COVID-19 pandemic has caused financial hardships for many hardworking business owners across the nation. The CARES Act was signed to provide economic assistance to keep companies afloat while navigating through these uncertain times. Postal Inspectors are committed to aggressively pursuing investigations in which the U.S. Mails are used to facilitate criminal schemes.”
According to Erskine, the indictment and other information presented in court: Aug. 11, agents with the U.S. Postal Inspection Service and the Drug Enforcement Administration (DEA) executed a search warrant at the Alicia Quarterman’s home in connection with an ongoing narcotics trafficking investigation.
A package containing methamphetamine hidden in dog food containers had been mailed to her home. As part of the court-authorized search, law enforcement seized her cell phones and discovered a handwritten ledger with the personal and banking information of several individuals.
After obtaining a second search warrant for the cell phones, postal inspectors uncovered hundreds of text messages and photos related to an additional crime, fraudulent EIDL and PPP business loans.
As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the EIDL and PPP initiatives offer COVID-19 relief funds to businesses impacted by the pandemic. Through the Small Business Administration (SBA), applicants could receive up to $10,000 for each EIDL if they qualified. They could also receive a PPP loan to fund payroll costs, interest on mortgages, rent and utilities.
According to the release, once Alicia Quarterman and her co-conspirator, Lawson, a former Fulton County sheriff’s deputy and current certified peace officer, became familiar with the requirements and applications for the EIDL program and the PPP, they allegedly crafted a scheme to submit fraudulent business loan applications on behalf of their friends and family who did not actually own businesses.
Alicia Quarterman would recruit co-conspirators who would send her their personal and banking information mostly via text message, and then she would send that information to Lawson, who would submit the applications to the SBA. After the fraudulent loans were paid out by the SBA or partner banks, the co-conspirators completed their scheme by allegedly paying Alicia Quarterman a “fee” from the proceeds of the fraudulent loans which she would split with Lawson.
Some of Quarterman and Lawson’s co-conspirators also allegedly recruited more participants to the scheme and then sent their information to Quarterman for fraudulent loan applications. As part of their crimes, the defendants not only submitted false information for the business loans, but for the PPP, they also allegedly created fake Internal Revenue Service documentation to support the applications.
Overall, between July 1 and Aug. 11, Alicia Quarterman sent Lawson the information for about 48 different individuals, and she allegedly completed about 58 fraudulent EIDL applications, seeking $490,000. In that same time frame, Lawson allegedly submitted 11 fraudulent PPP loan applications on behalf of many of the same individuals in an attempt to obtain at least $224,000. The defendants are charged with various counts of conspiracy to commit wire fraud, wire fraud, bank fraud, mail fraud and money laundering.