South Florida Resident Sentenced to Prison for COVID-19 Paycheck Protection Program Fraud

Summary

A press release published 2023-04-12 by the U.S. Attorney's Office for the Southern District of Florida announcing that Damian Davis, 41, was sentenced by the Honorable William P. Dimitrouleas to 24 months in prison and five years of supervised release for bank and wire fraud, and ordered to pay over half a million dollars in restitution. The office states that in June and July 2020 Davis applied for PPP loans for Wolf of Flagler, LLC, Crates Tavern, LLC and Fifth Marketing Group, LLC, falsely certifying employees and payroll, and received a total of $586,545. According to the release, Davis made no payroll, rent, utility or mortgage interest payments and on August 28, 2020 wired $31,000 described as equipment to buy a 2001 BMW M3. The case number is 22-cr-60186.

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MIAMI – Damian Davis, 41, has been sentenced in federal district court to 24 months in prison followed by five years of supervised release for bank and wire fraud as part of a scheme to defraud the Paycheck Protection Program (PPP) out of loan proceeds. These loans are guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security Act. Additionally, the Honorable William P. Dimitrouleas ordered Davis to pay over half a million dollars in restitution.
In June and July 2020, Davis applied for PPP loans in the name of the following three companies, which he owns; Wolf of Flagler, LLC, in the amount of $128,400; Crates Tavern, LLC, in the amount of $183,780, and Fifth Marketing Group, LLC, in the amount of $274,365. As a result of these loan applications, Davis received a total of $586,545 in PPP funds, which he used for his personal benefit.
For example, in one of the companies’ loan applications, Davis listed a loan amount of $274,365 and an average monthly payroll of $109,746, he falsely certified the companies’ number of employees and payroll payments. Also, he falsely certified that the funds would be used to support the ongoing operations of the company. After receiving the PPP loan proceeds, Davis did not make any payroll, rent, utility, or mortgage interest payments. Instead, he used the PPP funds to purchase a car. On August 28, 2020, Davis wired $31,000, from the PPP loan proceeds for the alleged purchase of “equipment.” However, Davis did not buy any equipment, he purchased a 2001 Blue BMW M3.
U.S. Attorney Markenzy Lapointe of the Southern District of Florida and Special Agent in Charge Matthew D. Line of the IRS Criminal Investigation (IRS-CI), Miami Field Office, announced the sentence imposed by U.S. District Judge Dimitrouleas.
IRS-CI Miami investigated the case, with assistance from the U.S. Small Business Administration Office of Inspector General (SBA-OIG), Investigations Division’s Eastern Region. Assistant U.S. Attorney Bertila Lilia Fernandez prosecuted the case. Assistant U.S. Attorney Emily Stone is handling asset forfeiture.
In March 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted. It was designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. Among other sources of relief, the CARES Act authorized and provided funding to the SBA to provide Economic Injury Disaster Loans (“EIDLs”) to eligible small businesses, including sole proprietorships and independent contractors, experiencing substantial financial disruptions due to the COVID-19 pandemic to allow them to meet financial obligations and operating expenses that could otherwise have been met had the disaster not occurred.  EIDL applications were submitted directly to the SBA via the SBA’s on-line application website, and the applications were processed and the loans funded for qualifying applicants directly by the SBA.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit
https://www.justice.gov/coronavirus
.
On September 15, 2022, the Attorney General selected the Southern District of Florida’s U.S. Attorney’s Office to head one of three national COVID-19 Fraud Strike Force Teams. The Department of Justice established the Strike Force to enhance existing efforts to combat and prevent COVID-19 related financial fraud. For more information on the department’s response to the pandemic, please click
here
.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at:
https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at
www.flsd.uscourts.gov
or at
http://pacer.flsd.uscourts.gov
under case number 22-cr-60186.
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