Three Additional Defendants in North Carolina Plead Guilty to National COVID-19 Fraud Scheme
Summary
Isaac Lamont Dawson, 44; Jackson Kyalo Ndoyo, 29; and Dontrell Rayshar Barnes, 32, each pleaded guilty in Raleigh to conspiracy to commit wire fraud over fraudulent PPP loans sought for companies they owned, including purported catering, music production and construction businesses, U.S. Attorney Michael Easley announced. According to the charging documents, Edward Whitaker and Schunda Coleman, who pled guilty on January 19, 2023, ran a nation-wide scheme that supplied falsified applications and documents in exchange for 25% of the loan proceeds. Whitaker then instructed each defendant how to make the loans appear to be paid out to employees while the money was transferred back, and the fake payroll records went to the SBA to obtain 100% loan forgiveness. Each defendant faces up to 20 years in prison; sentencing is before U.S. District Judge James C. Dever III.
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RALEIGH, N.C. – Isaac Lamont Dawson, 44; Jackson Kyalo Ndoyo, 29; and Dontrell Rayshar Barnes, 32, each plead guilty today to conspiracy to commit wire fraud for fraudulently obtaining Paycheck Protection Act (“PPP”) COVID-19 loans. The defendants sought relief on behalf of various companies they owned including companies listed as purportedly being engaged in catering, music production, and construction. They all face up to 20 years in prison. "At a time when most Americans were looking to help their neighbors, these defendants decided to steal from them by scamming a taxpayer funded program designed to help mom and pop businesses from going under,” said U.S. Attorney Michael Easley. “My office is continuing to investigate and prosecute the bad actors who conspired to use this lifeline to line their own pockets." According to the charged criminal information, the defendant conspired with Edward Whitaker, Schunda Coleman, and others to obtain a fraudulent PPP loan. Whitaker and Coleman pled guilty on January 19, 2023 for their role in operating a nation-wide scheme to help people across the country commit millions of dollars of PPP fraud. According to charging documents and information summarized in court, Whitaker and Coleman created fraudulent supporting documents and applications for the PPP loans which they provided to the defendants in exchange for 25% of the total loan proceeds. The fraudulent applications falsified the number of employees and gross wages being paid prior to the COVID pandemic, in order to help qualify for the PPP loans. Following the disbursement of the PPP loans, Whitaker instructed each defendant as to how to make it appear that the PPP loans were being paid out to employees, when in reality the money was transferred back to the defendants. The fraudulent payroll records were then submitted to the Small Business Administration (SBA) to obtain 100% loan forgiveness. Late last year , Quentin Jackson pled guilty in the same conspiracy which included the recruitment of numerous individuals in the Eastern District of North Carolina to use Whitaker and Coleman to obtain fraudulent PPP funds. “The Paycheck Protection Program was designed to help small businesses facing financial difficulties during the COVID-19 pandemic,” said Donald “Trey” Eakins, Internal Revenue Service (IRS) Criminal Investigation Special Agent in Charge in the Charlotte Field Office. “Through our partnership with the U.S. Attorney’s Office and our federal law enforcement partners, IRS Criminal Investigation Special Agents will continue to aggressively pursue individuals who try to exploit federal relief programs for their personal gain.” The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to provide emergency financial assistance to the millions of Americans who were economically suffering from the COVID-19 pandemic. The CARES Act and additional appropriations authorized up to $649 billion in forgivable loans to small businesses through the Paycheck Protection Program (PPP). Financial institutions issued the PPP loans, which were guaranteed by the SBA. Michael Easley, U.S. Attorney for the Eastern District of North Carolina, made the announcement after United States Magistrate Judge Robert T. Numbers II accepted the pleas. Sentencings will occur before United States District Judge James C. Dever III later this year. Internal Revenue Service (IRS) Criminal Investigation is leading the investigation, and Assistant U.S. Attorney David G. Beraka is prosecuting the cases. Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER . ###
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