2 guilty in $1 million COVID fraud scheme

Summary

Release of the U.S. Attorney's Office for the Southern District of Texas, published January 13, 2023, announcing that Dylan Kinlock entered a plea of guilty to conspiracy to commit wire fraud in connection with a scheme to defraud the United States of COVID related disaster loan proceeds. The release states that co-defendant Felicia Garza pleaded guilty to the same charge. It states that the scheme resulted in at least 241 fraudulent PPP loans and the distribution of more than $1 million, and that Kinlock received at least $709,665 in fee income from individuals assisted in securing the loans. Senior U.S. District Judge David Hittner accepted the pleas and set sentencing for April 11. The release states that each faces up to 20 years in prison and a possible $250,000.

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HOUSTON – A 30-year-old Orlando, Florida, man has admitted to conspiracy to commit wire fraud in connection with a scheme to defraud the United States of COVID related disaster loan proceeds, announced U.S. Attorney Alamdar S. Hamdani.
Dylan Kinlock entered his plea of guilty today. Co-defendant Felicia Garza, 36, Houston, pleaded guilty to the same charge Jan. 9.
Kinlock and Garza admitted they devised a scheme to solicit others to fraudulently apply for Paycheck Protection Program (PPP) loans the Coronavirus Aid, Relief and Economic Security (CARES) Act provided. The two utilized victims’ personal information to create falsified documents and applied for a PPP loan on their behalf.
The fraud scheme resulted in at least 241 fraudulent PPP loans which led to the distribution of more than $1 million Kinlock received at least $709,665 in fee income from individuals he assisted in securing the fraudulent PPP Loans.
Numerous individuals residing in the Southern District of Texas applied for PPP loans through Kinlock. They all reported that Kinlock attached fraudulent documents to their application without their knowledge, and that the applications contained false statements about the number of employees their business had.
The false documents included fictitious Schedule C tax forms reporting profit or loss from a business, 1099-MISC forms and invoices reporting incorrect income to qualify for the loans. Kinlock solicited each of his victims to execute a contract with him in which they agreed to share a portion of their PPP loans.
After Kinlock’s clients received their PPP loan funds, Kinlock directed the client to send him his fee through various means including direct deposit into his bank account or electronic payment methods Zelle, CashApp or Venmo. Kinlock’s fee ranged from $3000 to $4,000 per loan or 20% of the amount his client received.
He used the monies to pay off his home in Florida. As part of his plea, he has agreed to forfeit that residence.
The CARES Act is a federal law enacted March 27, 2020, to provide emergency financial assistance to the millions of Americans who suffered the economic effects caused by the COVID-19 pandemic.
Senior U.S. District Judge David Hittner accepted the pleas and set sentencing for April 11. At that time, each faces up to 20 years in prison and a possible $250,000.
Kinlock was permitted to remain on bond pending sentencing. Garza also remains on bond.
IRS - Criminal Investigation conducted the investigation. Assistant U.S. Attorney Jay Hileman is prosecuting the case.

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