Man Sentenced to Four Years for Committing COVID-19 Relief Fraud

Summary

A February 27, 2023 press release from the U.S. Attorney's Office for the Northern District of Illinois announcing that Carlos Smith, 58, of Park Forest was sentenced by U.S. District Court Judge Manish S. Shah on February 23, 2023 to four years in federal prison. The release states that while on home confinement near the end of a 60-month sentence for theft of government funds and aggravated identity theft, Smith submitted a fraudulent EIDL application in April 2020 and later obtained a PPP loan, lying about his business CLS Financial Services, Inc. and his criminal history and submitting fake tax documents. It says he received approximately $421,900 between the two loans and pleaded guilty to wire fraud and money laundering on June 22, 2022.

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Full text

CHICAGO — A suburban Chicago businessman has been sentenced to four years in federal prison for re-offending while still serving a federal sentence stemming from an earlier financial fraud conviction.
Shortly after being released from prison and while on home confinement near the end of his 60-month sentence for theft of government funds and aggravated identity theft, CARLOS SMITH, 58, of Park Forest began submitting fraudulent applications for government-backed loans intended to support businesses suffering economic effects from the Covid-19 pandemic.  Smith first submitted a fraudulent application for the Economic Injury Disaster Loan (“EIDL”) Program, run by the Small Business Administration (SBA), in April 2020, while he was on home confinement.  Shortly after obtaining the EIDL funds, and while serving the supervised release portion of this prior sentence, he fraudulently sought and obtained a second loan, this time through the Paycheck Protection Program (“PPP”).  In both applications, Smith lied about the condition and performance of his purported business, CLS Financial Services, Inc., which did not operate during the year prior to the pandemic, when defendant was incarcerated.  In the PPP application, Smith also lied about his criminal history and submitted fake tax documents.  Between the two loans, Smith received approximately $421,900.  Smith pleaded guilty to one count of wire fraud and one count of money laundering on June 22, 2022.
The sentence was imposed by U.S. District Court Judge Manish S. Shah on February 23, 2023.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Justin Campbell, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; and Hannibal Ware, Inspector General of the U.S. Small Business Administration.  The government is represented by Assistant U.S. Attorney Heidi Manschreck.
Anyone with information about attempted fraud involving COVID-19 can report it to the Department of Justice by calling the National Center for Disaster Fraud Hotline at 866-720-5721, or filing an online complaint form at
https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
.

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