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A Dormant Street-Promotions LLC Funded a Camden Yards-View Apartment and a Mercedes

A federal judge in Baltimore sentenced Lawrence A. Walker, 64, of Baltimore, to 24 months in federal prison, followed by six months of home confinement and three years of supervised release, for conspiracy to commit wire fraud in fraudulently obtaining more than $262,000 through the Paycheck Protection Program. U.S. District Judge Richard D. Bennett ordered Walker to forfeit cash seized during a search, a Mercedes-Benz, and pay a money judgment and restitution of $232,152.1

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According to the plea agreement, from March through December 2021, Walker and a co-conspirator schemed to fraudulently obtain a PPP loan for Walker's business, Nutscola Street Promotions LLC, which had no employees and was not in operation at the time. On March 21, 2021, the pair submitted a loan application falsely claiming Nutscola had 13 employees and average monthly payroll of $104,900.87, supported by a fabricated tax form and a fabricated February 2020 bank statement. Walker had opened the Nutscola bank account itself only on March 6, 2021, as part of the scheme. The loan was funded, distributing approximately $262,252 to the Nutscola account, and Walker paid his co-conspirator a kickback of two checks totaling $78,000, about 30 percent of the loan.2

To make the funds appear legitimately spent, Walker signed an agreement with a payroll processor on March 30, 2021, to issue payments from the PPP funds to purported Nutscola employees, including himself, his brother, and various friends and associates. A total of $159,000 in sham payroll payments went out this way; none of the purported employees actually worked for Nutscola, and several returned the funds directly to Walker. He used the loan proceeds to buy a Mercedes-Benz worth more than $76,000 and to lease and fully furnish a luxury downtown Baltimore apartment overlooking Camden Yards. On December 31, 2021, Walker's co-conspirator also fraudulently applied for an Economic Injury Disaster Loan on Nutscola's behalf, though that loan never closed.2

On April 26, 2022, law enforcement executed a federal search warrant at Walker's residence, seizing electronic devices and more than $30,000 in cash, traceable to the fraudulent PPP funds, hidden in a garbage bag inside a bedroom heater. Walker made no payments on the PPP loan, and the full $262,252 remained outstanding at sentencing. The case was investigated by the FBI's Baltimore Field Office and the Baltimore County Police Department, with assistance from the SBA Office of Inspector General, as part of the District of Maryland COVID-19 Strike Force. Assistant U.S. Attorney Paul A. Riley prosecuted the case.12

Documents cited

Notes

  1. U.S. Attorney's Office for the District of Maryland, "Baltimore Man Sentenced to 24 Months in Federal Prison for Scheme to Obtain More Than $550,000 in Fraudulent Covid-19 CARES Act Loans" (original), October 31, 2023. ↩1 ↩2
  2. U.S. Attorney's Office for the District of Maryland, "Baltimore Man Pleads Guilty to Federal Charge in Connection with Scheme to Obtain More Than $550,000 In Fraudulent COVID-19 Cares Act Loans" (original), June 1, 2023. ↩1 ↩2 ↩3
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