Three Peoria Men Sentenced for Paycheck Protection Program Fraud

Summary

A press release from USAO - Illinois, Central, published 2023-09-06, "Three Peoria Men Sentenced for Paycheck Protection Program Fraud". It announces that on September 5, 2023 U.S. District Judge James E. Shadid sentenced three Peoria men for false statements related to the PPP: Kendall A. Mack, 26, to three years' probation and time served with $39,239.08 in restitution; Rasheem McCree, 38, to 27 months with $89,981.34 in restitution; and Adrian Lamont Morris, 27, to 24 months with $60,642 in restitution. The release states that each claimed to be the sole proprietor of a barber shop, although none had a registered shop, employees or payroll and none were licensed barbers. It states that McCree and Morris also fraudulently obtained unemployment benefits from several states.

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PEORIA, Ill. – Three Peoria, Illinois, men were sentenced on September 5, 2023, by U.S. District Judge James E. Shadid for making false statements related to the federal Paycheck Protection Program (PPP). Two of the three were also held responsible for fraudulently obtaining unemployment insurance benefits from multiple states.
The PPP provided federal funds to small businesses that were directly affected by the COVID-19 pandemic to pay up to eight weeks of payroll costs, rent, utilities and mortgage interest. The program was implemented by the Small Business Administration and administered by third-party lenders. The PPP was enacted via the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, an economic bill that passed in March 2020 in response to the economic fallout caused by the pandemic.
The three men were indicted in October 2022. Kendall A. Mack, 26, pleaded guilty in May 2023 to one count of making a false statement in April 2021 to obtain a PPP loan. From April to September 2021, Mack fraudulently obtained PPP funds to which he was not entitled by submitting a fraudulent PPP application, as well as a fraudulent PPP loan forgiveness application. He was held responsible for losses to the Small Business Administration and Capital Plus Financial, LLC, in the amount of $39,239.08. Mack was sentenced to three years’ probation and imprisonment for a period of time served. Judge Shadid also ordered Mack to pay restitution in the amount of $39,239.08.
Rasheem McCree, 38, pleaded guilty in April 2023 to one count of making a false statement in March 2021 by submitting a false application for PPP funds. He also admitted to fraudulently obtaining unemployment benefits from five states, including the Nevada Department of Employment, Training and Rehabilitation; the Arizona Department of Economic Security; the Pennsylvania Department of Labor and Industry; the New York State Department of Labor; and the Illinois Department of Employment Security. McCree was sentenced to 27 months’ imprisonment, to be followed by three years of supervised release. Judge Shadid also ordered McCree to pay $89,981.34 in restitution to the SBA and the states.
Adrian Lamont Morris, 27, pleaded guilty in April 2023 to one count of making a false statement in March 2021 by submitting a false application for PPP funds. In addition to the PPP loan, Morris filed for unemployment benefits from Illinois, Louisiana, and Pennsylvania, for a loss to the SBA and those states of $60,642. Morris was sentenced to 24 months’ imprisonment, to be followed by three years of supervised release. Judge Shadid also ordered Morris to pay $60,642 restitution.
On their applications, each of the defendants claimed to be the sole proprietor of a barber shop. However, none of them had a registered barber shop, employees, a payroll, or business-related expenses. None were licensed barbers.
In sentencing McCree and Morris, Judge Shadid noted their significant criminal histories. McCree and Morris were ordered to report to the Bureau of Prisons on November 14, 2023.
The statutory penalties for false statements under 18 U.S.C. §1001(a)(3) are up to five years’ imprisonment, a possible $250,000 fine, and up to a three-year term of supervised release.
The Internal Revenue Service, Criminal Investigation, and the Federal Bureau of Investigation, Springfield Field Office, investigated the case. Criminal Chief Darilynn J. Knauss represented the government in the prosecution.

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