U.S. Department of Labor OIG, Prince George’s County Man Pleads Guilty To A Federal Wire Fraud Conspiracy To Obtain Over $1 Million In Covid-19 Cares Act Loans And Unemployment Insurance Benefits (USAO D-MD 02/17/2023) (2023-02-24)

Summary

A press release from the U.S. Attorney's Office, District of Maryland, dated February 17, 2023, announcing that Jerry Phillips, also known as Tian Juzo, age 25, of Capitol Heights, Maryland, pleaded guilty to a federal wire fraud conspiracy, aggravated identity theft and illegal possession of a machine gun. According to the plea agreement, from March 2020 to February 2022 Phillips worked with co-defendant Jaleel Phillips to file fraudulent PPP and EIDL loan applications and unemployment insurance claims using fictitious aliases and the identifying information of real people. Phillips admitted personally obtaining and controlling more than $1 million in fraud proceeds and using $65,538.95 to buy a Chevrolet Camaro. A search of the residence recovered more than 25 fake driver's licenses and four ghost guns, one modified into a machine gun.

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                                      Department of Justice
                                       U.S. Attorney’s Office
                                        District of Maryland

FOR IMMEDIATE RELEASE                                                  Friday, February 17, 2023

  Prince George’s County Man Pleads Guilty To A Federal Wire
  Fraud Conspiracy To Obtain Over $1 Million In Covid-19 Cares
       Act Loans And Unemployment Insurance Benefits
  A Search At The Defendant’s Residence Also Recovered Four “Ghost Guns,”
            Including One that Was Modified to be a Machinegun
Greenbelt, Maryland – Jerry Phillips, a/k/a “Tian Juzo,” age 25, of Capitol Heights, Maryland,
pleaded guilty today to a federal wire fraud conspiracy, aggravated identity theft, and illegal
possession of a machine gun, related to a scheme to fraudulently obtain more than $1 million in
COVID-19 CARES Act Paycheck Protection Program loan applications (PPP), Economic Injury
Disaster loan applications (EIDL), and unemployment insurance claims.

The guilty plea was announced by Erek L. Barron, United States Attorney for the District of
Maryland; Acting Special Agent in Charge Troy W. Springer, of the National Captial Region, U.S.
Department of Labor - Office of Inspector General (DOL-OIG); Special Agent in Charge Kareem A.
Carter of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office;
Special Agent in Charge Amaleka McCall-Brathwaite of the Small Business Administration - Office of
Inspector General, Eastern Region, and Acting Special Agent in Charge Mike Serra, of the Mid-
Atlantic Region, Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG).

“Fraudsters like Jerry Phillips often commit other crimes, as demonstrated by his illegal possession
of a ghost gun, which he modified to be a machine gun,” said United States Attorney Erek L.
Barron. “We will continue to use every legal means necessary to remove illegal guns from our
communities and to hold criminals accountable.”

“Jerry Phillips conspired with his brother to defraud the UI, PPP, and EIDL pandemic relief
programs of more than $750,000 in funds intended to assist those who were truly in need from the
financial impact brought about by the COVID-19 pandemic,” said Troy W. Springer, Acting Special
Agent in Charge of the National Capital Region, U.S. Department of Labor – Office of Inspector
General. “My office will continue to work closely with the U.S. Attorney’s Office for the District of
Maryland and our other law enforcement partners to pursue those who unwisely chose to commit
pandemic-related UI fraud and hold them accountable for their criminal conduct.”

“During this pandemic, we have all too often seen people take advantage of programs meant to help
those in need, stealing money away from those in crisis,” said Kareem A. Carter, Special Agent in
Charge of the IRS-CI Washington D.C. Field Office. “We will continue in our partnership with fellow
federal agencies to investigate individuals who illegally use pandemic relief funds for personal
financial gain.”

“Conspiring to fraudulently gain access to SBA program funds by falsifying personal identifying
information is reprehensible,” said SBA OIG’s Eastern Region Special Agent in Charge Amaleka
McCall-Brathwaite. “OIG and its law enforcement partners will relentlessly pursue fraudsters and
bring them to justice. I want to thank the U.S. Attorney’s Office and our law enforcement partners for
their dedication and commitment to seeing justice served.”
According to his plea agreement, from March 2020 to February 2022, Phillips worked with his
brother and co-defendant, Jaleel Phillips, and at least one other person. to fraudulently obtain
COVID-19 related benefits, including filing fraudulent PPP loan applications, EIDL loan
applications, and unemployment insurance claims. As detailed in the statement of facts, Phillips and
his co-conspirators created fictitious aliases, used the personal identifying information of real
people, and used defunct corporate entities or new business entities with no actual business
operations to apply for EIDL and PPP loans, and unemployment benefits.

As part of the scheme, Phillips admitted that he created and used multiple fake identities to submit
fraudulent PPP and EIDL loan applications and used the personal identifying information of more
than 20 real people in furtherance of fraudulent unemployment claims. The fraudulently obtained
PPP and EIDL loans and unemployment insurance claims were deposited into the bank accounts
opened in the names of the aliases. The money was then withdrawn by Phillips and his co-
conspirators through ATM withdrawals and purchases made on the associated debit and credit cards
or transferred between the various financial accounts established in the aliases’ names. Phillips used
$65,538.95 of the fraudulently obtained funds to purchase a 2020 Chevrolet Camaro, which he
registered in his name at the Maryland Motor Vehicle Administration. Jerry Phillips also admitted
that he personally obtained and controlled more than $1 million in fraud proceeds from the
fraudulent PPPs and EIDLs.

A search of the defendant’s residence recovered more than 25 fake driver’s licenses from multiple
states and multiple identification documents from different jurisdictions with the same alias. Law
enforcement also recovered four “ghost guns” which Jerry Phillips purchased online, using an
alias. Phillips admitted that he illegally modified one of the ghost guns into a machine gun capable
of firing multiple rounds with one pull of the trigger.

Jaleel Phillips, age 25, of Capitol Heights, Maryland, previously pleaded guilty to his role in the wire
fraud conspiracy and faces a maximum sentence of 30 years in federal prison. U.S. District Judge
Theodore D. Chuang has scheduled sentencing for April 14, 2023, at 9:30 a.m.

Jerry Phillips faces a maximum sentence of 30 years in federal prison for the wire fraud conspiracy; a
mandatory sentence of two years in federal prison, consecutive to any other sentencing imposed, for
aggravated identity theft; and a maximum of 10 years in federal prison for illegal possession of a
machine gun. Judge Chuang has scheduled sentencing for Jerry Phillips on May 16, 2023, at 2 p.m.

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.

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.

United States Attorney Erek L. Barron commended the DOL-OIG, IRS-CI, SBA-OIG, FDIC-OIG, and
the Mississippi Attorney General’s Office for their work in the investigation. Mr. Barron thanked
Assistant U.S. Attorney Harry M. Gruber, who is prosecuting the federal case. He also thanked the
Office of Mississippi Attorney General Lynn Fitch-Public Integrity Division, for its assistance.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available
to report fraud, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/report-
fraud.

                                               ###
Component(s):
USAO - Maryland
                                                                              Updated February 17, 2023


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