Washington man who scammed pandemic relief programs sentenced to over five years in prison (Press Release)

Summary

A press release from the U.S. Attorney's Office, Eastern District of Virginia, dated August 2, 2024, announcing that Clayton Rosenberg was sentenced by Senior U.S. District Judge Claude M. Hilton to five years and three months in prison for wire fraud, Case No. 1:24-cr-61. According to court documents, Rosenberg and co-conspirators submitted at least 16 fraudulent PPP loan applications with inflated employee numbers and payroll costs, causing a total loss of at least $9.3 million, of which Rosenberg received at least $1,666,290. The release states that Rosenberg also received over $110,308 in UI and pandemic unemployment assistance benefits. It states that device-making equipment, fraudulent Social Security cards and fake driver licenses were found in Rosenberg's residence.

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Full text

PRESS RELEASE



Washington man who scammed
pandemic relief programs
sentenced to over five years in
prison
Friday, August 2, 2024

For Immediate Release
U.S. Attorney's Office, Eastern District of Virginia

ALEXANDRIA, Va. – A Washington man was sentenced today to five years and three
months in prison for wire fraud.

According to court documents, from at least June 2020 through at least June 2021,
Clayton Rosenberg, aka Kenneth Clayton and Kobe, 31, and his co-conspirators submitted
fraudulent applications to defraud multiple COVID-19 relief programs. Rosenberg used
these stolen funds to increase his typical lifestyle, including luxury vehicle purchases and
$1,800 for beard care products.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided emergency
financial assistance expeditiously to Americans suffering the economic effects caused by
the pandemic. The Paycheck Protection Program (PPP) authorized forgivable loans to
small businesses for such expenses as making payroll payments to remain afloat. Federal
programs also expanded unemployment insurance (UI) eligibility and increased
unemployment benefits during the pandemic to assist those who lost their jobs or were
otherwise unable to work through no fault of their own.

Rosenberg and his co-conspirators prepared and submitted at least 16 fraudulent PPP
loan applications for businesses or purported businesses. In the applications, Rosenberg
and his co-conspirators grossly inflated employee numbers and monthly payroll costs.
They also created and submitted false tax returns and fake bank statements in support of
the applications.
After the financial institutions approved and funded the loan applications, the business
owners would share the loan proceeds with Rosenberg and his co-conspirators. During
this time, Rosenberg and a co-conspirator controlled various shell companies to which
the business owners often would transfer a percentage of the PPP loan proceeds. The
payout of these fraudulent PPP loans and the wire fraud conspiracy caused a total loss of
at least $9.3 million, of which Rosenberg received at least $1,666,290.

Rosenberg and his co-conspirators also submitted fraudulent UI applications using other
individuals' personal identifying information (PII) that they obtained online. The benefits
were issued on prepaid debit cards mailed to addresses the conspirators listed on the
applications. Along with individuals' PII, the conspirators included false information in the
applications and certifications, including false employment and wage history as well as
false contact information. Rosenberg applied for and received over $110,308 in UI and
pandemic unemployment assistance benefits.

Rosenberg also possessed device-making equipment in his residence, including
equipment to create fraudulent documents, black check paper, card stock for IDs,
holograms used for passports and driver licenses, at least six fraudulent Social Security
cards, and at least eight fake driver licenses. Rosenberg made at least two fake Burkina
Faso passports and at least one unauthorized United States passport.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; David J. Scott, Special
Agent in Charge of the FBI Washington Field Office's Criminal and Cyber Division; Matt
McCool, Special Agent in Charge of the U.S. Secret Service’s Washington Field Office;
Special Agent in Charge Michael McGill of the Social Security Administration (SSA) - Office
of Inspector General (OIG) Philadelphia Field Division; Charles “Andy” Penn, Arlington
County Chief of Police; Troy W. Springer, Special Agent in Charge, National Capital Region,
U.S. Department of Labor, Office of Inspector General; and Jason J. Scalzo, Special Agent
in Charge of the Electronic Crimes Unit for the Federal Deposit Insurance Corporation
Office of Inspector General (FDIC-OIG), made the announcement after sentencing by
Senior U.S. District Judge Claude M. Hilton.

Assistant U.S. Attorneys Kathleen Robeson and Zachary H. Ray prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the
Eastern District of Virginia. Related court documents and information are located on the
website of the District Court for the Eastern District of Virginia or on PACER by searching
for Case No. 1:24-cr-61.

Contact
Press Officer
USAVAE.Press@usdoj.gov

Updated August 2, 2024

Topics
DISASTER FRAUD

FINANCIAL FRAUD


Components
Federal Bureau of Investigation (FBI)
USAO - Virginia, Eastern


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