Valesky Barosy was an up-and-coming entrepreneur, having immigrated from Haiti and quickly making a name for himself in southern Florida as a million-dollar deal-maker.
When the pandemic hit, he saw a ticket to even faster wealth by helping others steal from COVID-19 business loan programs. He took up to 30% as his cut that prosecutors said he spent on flashy clothes, fancy watches and a fast car — a Lamborghini Huracan Evo.
Barosy, convicted at trial last month for the scam, is far from the only one.
For thousands of unscrupulous people, the government’s pandemic assistance programs were the equivalent of winning scratch-off lottery tickets.
Indeed, that was how Ganell Tubbs, who made off with nearly $2 million in bogus pandemic loans, described her newfound wealth. She sent $150,000 to a relative after saying she had “won the lottery.”
Upon getting the money, Tubbs treated herself to a two-day online shopping spree at Apple, Michael Kors, North Face and Nike.
Jason Carl Pears bought a piano, furniture and luxury goods from Gucci and Louis Vuitton. He also bought two homes, traveled and had plastic surgery.
Shaneesha White, who stole nearly $50,000 in unemployment benefits, also used the money to pay for plastic surgery and to buy drugs.
Luxury car dealers seem to have been particular favorites for fraudsters, with Maseratis, Mercedes, Teslas and even a Rolls Royce or two zooming off the lots. Rolex watches, exotic trips, plastic surgery and real estate were also popular big-ticket items bought with COVID-19 relief money.
Plenty of others, though, said they put their money toward personal expenses. Some made tuition payments; others paid off credit card balances. Jason Scott Carter, a former police officer in Coral Springs, Florida, used $21,788 in bogus pandemic payments to trick out his 1969 Ford Mustang.
Marie Springer, who studies white-collar crime as an adjunct associate professor at the John Jay College of Criminal Justice in New York, said some cases bear similarities to white-collar crime, but the chief defining feature of pandemic fraud is that it was a crime of opportunity: The government made money readily available, and people took it.
“They do it because they can, because they’re greedy and they want it and they somehow feel they’re smart enough to get away with it,” she said.
Ms. Springer examined dozens of cases and said the average fraud was $1.9 million, though that amount was skewed by several cases involving much more.
She figured that a majority of fraudsters came in below $1 million.
Ms. Springer found a striking number of women involved. Of the cases she looked at, 23% of the people involved were women. For most white-collar crime, the rate hovers around 10% to 15%, she said.
Some fraudsters claimed altruistic motives.
Oumar Sissoko, an immigrant from Senegal, said he just wanted to build a business with the $7.25 million he received. He didn’t realize that the government was paying only for businesses already up and running, he told a judge through his attorney.
“Had he wanted to, he could’ve brought multiple houses during this time and easily spent the loan money. But he didn’t because he intended to do what he wrote on the loan application: build a business,” the lawyer said.
Prosecutors said that is tough to square with what Sissoko did spend.
Within days of getting the $7.25 million, Sissoko bought a $100,000 Mercedes. Investigators also connected pandemic money to purchases at Apple, Nordstrom and Birkenstock. All told, he spent $370,000 in the first week.
The only thing that headed off more spending was that his bank realized it had made a mistake and froze the rest of the funds, prosecutors said.
Michael Kornaker began serving supervised release on June 15, 2020, after a 28-month sentence for fraud. That same day, he filed a bogus pandemic loan application using a defunct towing company and his father’s identity to hide his felony convictions, which should have blocked him from getting a loan.
His niece ratted him out.
Korner’s attorney said his fraud had altruistic motives: He wanted to get the towing company up and running, and he figured his father would want to help him even though he never sought permission to use his identity.
“It was fueled by a harmful desperation to fast forward reintegration in the community and to reestablish a past life,” the lawyer said.
Other fraud suspects were blunter about their intentions.
Jeannine R. Buford, accused of helping steal $291,000 in bogus loans, sent a text to a co-conspirator saying there was easy money to be made and she felt it was time she was one of those making it, prosecutors said.
“I’m tired of struggling it’s time to put the ski mask on,” she texted a friend. “I’m about to get bold as [expletive]! Especially while nobody’s paying attention … due to corona.”
Porshia L. Thomas, the woman Ms. Buford was texting, has pleaded guilty to her part in the fraud. She spent her money on an Audi S5, living expenses and items from Neiman Marcus, Bath and Body Works and Victoria’s Secret.
Brandon Lamar Williams, a would-be rapper from Georgia whom prosecutors described as “a violent, gun-toting, gang-banging, drug-dealing six-time felon.” He was charged with nine counts, including weapons violations.
“Williams simply wanted money, so he committed fraud to obtain it,” his attorney told the judge. “There’s no underlying reason other than greed.”
Luckily for Williams, President Biden’s blanket pardon for some marijuana offenses squelched the two drug convictions, and he was left with the pandemic fraud charge. His attorney said that should have earned him a sentence of about 30 months.
Unluckily for Williams, the judge looked at his history of mayhem and slapped him with 60 months in prison.
Jerrod Bellamy, a soldier stationed in Georgia, told the judge his decision to apply for bogus Paycheck Protection Program loans, intended to keep small businesses afloat, was almost a foregone conclusion for someone raised in his circumstances in the Black community.
Indeed, he saw it as just another “hustle.” It didn’t help that he was going through a divorce and needed money at the same time the government was making cash available.
“PPP loans proved irresistible to those who had grown up engaging in an informal economy within a community that distrusts, holds little respect for, or just tends to be apathetic toward large government agencies in general,” Bellamy’s attorney told the judge. “There was an opportunity that proved to be very easy to obtain a large amount of cash with victims that for him could easily be rationalized away.”
Bellamy has been discharged from the Army. He was slapped with a 22-month prison sentence and ordered to pay back $223,807 in money he stole.
Travis McKenzie, an immigrant from Jamaica, blamed his impoverished upbringing and abandonment by his mother, who fled to the U.S. when he was young. Though he eventually followed her, he still suffered from what his attorney said were “deep-rooted emotional and mental health issues” that led him to drug addiction and later to steal more than half a million dollars in unemployment benefits.
He blew his cash on Louis Vuitton and Prada handbags.
Some fraudsters took thoughtful approaches to their gains and pumped their windfalls into investments.
George Thacker, who had been serving as county executive in Rhea County, Tennessee, paid off his credit card bills with the $650,000 he stole and then siphoned money to his E*Trade account. He also bought Bitcoin, Ether and other cryptocurrencies.
Andrew Aaron Lloyd also looked like he had a serious eye on the future with more than $4 million he bilked from COVID-19 funds.
He bought 25 properties in Oregon and California and transferred $1.8 million to his trading account, where he bought 15,740 shares of Tesla stock. At the time of his sentencing in January 2022, the portfolio was worth more than $18 million.
Not everyone was savvy.
Shaan Diyali pumped $49,000 he received from a bogus small-business loan into a Robinhood stock trading account. He lost it all.
For more information, visit The Washington Times COVID-19 resource page.