Former SBA Employee Charged with Wire and Bank Fraud (July 10, 2024)

Summary

A press release from the U.S. Attorney's Office for the Southern District of Florida, dated Wednesday, July 10, 2024, announcing that Malaina Chapman, 37, of Hialeah, has been charged with conspiracy to commit wire fraud, wire fraud and bank fraud in case number 24-mj-03358. According to allegations in the criminal complaint, Chapman was a Disaster Relief Specialist with the Small Business Administration from September 28, 2020, through a resignation on March 18, 2021. The complaint alleges that Lender 3 approved a loan of $17,052.50 for Upscale Credit Lounge and a PPP loan of $35,477.50 for DA TRAP based on false tax forms. It also alleges that the State of Florida approved Emergency Rental Assistance payments totaling $15,000 into accounts controlled by Chapman.

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PRESS RELEASE



Former SBA Employee Charged
with Wire and Bank Fraud in
Connection with Filing False
Applications for PPP and EIDL
Loans and Covid-19 Rental
Assistance
Wednesday, July 10, 2024


For Immediate Release
U.S. Attorney's Office, Southern District of Florida

MIAMI – Malaina Chapman, 37, of Hialeah, Fla. has been charged with conspiracy to
commit wire fraud, wire fraud and bank fraud. She had her initial appearance in Miami
federal court today.

According to allegations in the criminal complaint, Chapman was employed as a Disaster
Relief Specialist with the Small Business Administration (SBA) from Sept. 28, 2020, through
her resignation on March 18, 2021. While employed by the SBA, Chapman became
involved in multiple schemes to defraud the Paycheck Protection Program (PPP) and
Economic Injury Disaster Loan (EIDL) program, as well as to defraud local credit unions
and local and state programs designed to assist those affected by the Covid-19 pandemic
pay their rent.

“Disaster relief was intended for people in need, namely functioning businesses, corporate
forms, and sole proprietorships facing uphill prospects during the pandemic, not for those
who sought to pad their pockets and defraud the government by making up entities or
overstating their payroll and revenues to qualify for the relief," stated U.S. Attorney
Markenzy Lapointe for the Southern District of Florida. “We will continue to hold anyone
accountable who exploits and defrauds financial institutions and the government’s
pandemic response to enrich themselves at the expense of struggling businesses,
employees, and local tenants. While the COVID-19 relief programs have ended, our
commitment to identifying and prosecuting those who defrauded them has not.”

“Today’s charges highlight our unwavering commitment to protecting the integrity of SBA
programs,” said SBA OIG’s Eastern Region Special Agent in Charge Amaleka McCall-
Braithwaite. “Exploiting relief efforts for personal gain undermines public trust and
deprives legitimate businesses of essential assistance. I want to thank the U.S. Attorney’s
office and our law enforcement partners for their support and dedication to ensuring that
those who engage in fraudulent schemes are held accountable to the fullest extent of the
law.”

On Feb. 10, 2021, Chapman, while employed by the SBA, submitted, via interstate wire
communication, a loan application in the name of Upscale Credit Lounge to Lender 3. In
support of her application, Chapman submitted a purported tax year 2020 Schedule C
form that reported gross revenues of $103,674 and a tentative profit of $81,860. Lender
3 relied upon the representations in Chapman’s application and on Feb. 11, 2021,
approved a loan in the amount of $17,052.50. Further investigation revealed that the
Schedule C, attached to Chapman’s application was false and fraudulent.

On Feb. 19, 2021, Chapman, again while still employed by the SBA, submitted, via
interstate wire communication, a PPP loan application with Lender 3 on behalf of DA
TRAP. In her application, Chapman claimed that she had four employees and an average
monthly payroll of $14,191. In support of her application, Chapman submitted four IRS
Employers Quarterly Tax Return forms (Form 941), which purportedly documented the
wages paid by DA TRAP. Lender 3 relied upon the representations in the application and
on Feb. 26, 2021, approved a loan in the amount of $35,477.50. Further investigation
revealed that the multiple IRS Forms 941 attached to Chapman’s application were false
and fraudulent.

Chapman also conspired with others to submit false and fraudulent PPP loan applications
on their behalf. Six defendants were charged in Case No. 24-CR-20079 and in that case
defendant Raisha Kelly was the alleged ringleader of the conspiracy and prepared and
caused the preparation of numerous false and fraudulent loan applications to be
submitted to SBA-approved PPP lenders. Chapman aided and abetted this conspiracy by
creating false and fraudulent IRS documents and sending them to Kelly, who in turn used
them to submit false and fraudulent applications for PPP loans.

In addition to defrauding the PPP program, Chapman is also charged with taking
advantage of the State of Florida and the City of Miami’s Covid-19 Emergency Rental
Assistance Programs. Specifically, on Oct. 13, 2021, Chapman began the process of
applying for benefits under the State of Florida’s Emergency Rental Assistance program.
Chapman was purportedly a tenant at a residence in Miami. Chapman submitted required
information and documents through an online portal set up to distribute benefits under
the program. On Jan. 20, 2022, Chapman submitted a written document titled “3-day
notice to pay rent or quit.” These documents were dated Dec. 7, 2021, and purportedly
signed by Individual 2, the defendant’s mother. Individual 2 died on May 25, 2020. The
State of Florida accepted the representations in Chapman’s application and approved
payments totaling $15,000. These payments were made into bank accounts controlled by
Chapman.

U.S. Attorney Markenzy Lapointe for the Southern District of Florida; Special Agent in
Charge Jonathan Ulrich, U.S. Postal Service Office of Inspector General (USPS OIG); Special
Agent in Charge Amaleka McCall-Brathwaite, U.S. Small Business Administration Office of
Inspector General (SBA OIG), Investigations Division’s Eastern Region; and Special Agent
in Charge Mathew Broadhurst of the U.S. Department of Labor Office of Inspector General
(DOL-OIG), Southeast Region, made the announcement.

USPS OIG, SBA OIG and DOL-OIG handled the investigation. This case is being prosecuted
by Assistant U.S. Attorney Daniel Bernstein.

The charges contained in the criminal complaint are merely accusations and all defendants
are presumed innocent unless and until proven guilty in a court of law.

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. The Strike Force combines law
enforcement and prosecutorial resources and focuses on large-scale, multistate pandemic
relief fraud perpetrated by criminal organizations and transnational actors, as well as
those who committed multiple instances of pandemic relief fraud. The Strike Force uses
prosecutor-led and data analyst-driven teams to identify and bring to justice those who
stole pandemic relief funds. Additional information regarding the Strike Force may be
found at https://www.justice.gov/opa/pr/justice-department-announces-covid-19-fraud-
strike-force-teams.

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 24-mj-03358.

                                          ###

Contact
Public Affairs Unit

U.S. Attorney’s Office

Southern District of Florida

USAFLS.News@usdoj.gov

Updated July 10, 2024

Topics
CORONAVIRUS

DISASTER FRAUD
Component
USAO - Florida, Southern


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