- The Washington Times - Tuesday, May 19, 2020

A Texas man is facing federal charges after he allegedly created over 500 phony employees through an internet random-name generator to fraudulently apply for more than $5.5 million in coronavirus stimulus loans, according to an indictment unsealed Tuesday.

The monetary amount is the largest of any coronavirus-stimulus fraud case brought so far by federal prosecutors.

Samuel Yates, 32, of Maud, Texas, is charged with wire fraud, bank fraud, making false statements to a financial institution and false statements to the Small Business Administration (SBA).

Prosecutors said Mr. Yates asked two banks for millions of dollars in forgivable loans guaranteed by the SBA under the Coronavirus Aid Relief and Economic Security (CARES) Act.

Mr. Yates told the first bank he needed $5 million to cover the costs of more than 400 employees with an average monthly payroll of $2 million, the Justice Department said. In the second application, Mr. Yates obtained a $500,000 loan by telling the bank he had more than 100 employees, according to prosecutors.

Prosecutors said Mr. Yates did not have any employees and created the fraudulent names using an internet random-name generator. Mr. Yates is also accused of submitting forged tax documents with each application.

“Today’s arrest should serve as a strong deterrent to anyone considering exploiting the COVID-19 pandemic to enrich themselves through fraud,” said Ryan L. Spradlin, special agent in charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

“These individuals have no concern for legitimate businesses whose employees and their families are hurting financially during these unprecedented times,” he said.

Mr. Yates is the fourth individual to face federal charges over purported false statements to gain coronavirus relief funds.

Earlier this month, prosecutors filed charges against two New England businessmen accused of conspiring to secure more than $500,000 in loans using phony bank statements.

The Justice Department last week brought charges against reality TV star Maurice Fayne who is accused of using the stimulus money to buy diamond jewelry and a Rolex watch and to fund child support.

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