Former Seattle resident indicted for bank fraud for allegedly stealing more than $500,000 from Paycheck Protection Program

Seattle – A 28-year-old New York Metropolis man was indicted this week within the Western District of Washington for 3 counts of financial institution fraud associated to his abuse of the COVID-19 Pandemic Paycheck Safety Program (PPP), introduced U.S. Lawyer Nick Brown. Donte Jamal McClellon was a resident of Seattle when he submitted falsified paperwork to acquire $500,948 in mortgage proceeds from three completely different banks in Might and June 2020.  Beneath the Coronavirus Assist, Reduction, and Financial Safety (“CARES”) Act such funding was supposed to assist small companies climate the pandemic storm.

“Those that swooped in early with false and cast paperwork to say mortgage funds, robbed official companies of the help they wanted,” mentioned U.S. Lawyer Nick Brown. “Prosecuting pandemic fraud is a high precedence of the Division of Justice and an ongoing focus for investigators right here in Seattle.”

In accordance with data filed within the case, McClellon used the names of three restricted legal responsibility firms he had as soon as registered within the State of Washington to make his claims.  Every of the entities, ‘Frostlake,’ ‘Cannonlake,’ and ‘Skylake’ LLC, had been inactive and confirmed no indicators of enterprise exercise in any state or federal registries within the years main as much as the pandemic.  However, in Might and June 2020, McClellen submitted Paycheck Safety program purposes claiming the entities every had as many as 13 workers and, in a single case, gross receipts of greater than $1.6 million.  McClellan allegedly cast a number of Inside Income Service kinds to make it seem the three firms had been working actual property or retail companies, with workers who would profit from the Paycheck Safety Program loans.  McClellan claimed the companies operated out of his dwelling tackle in Seattle.  The investigation revealed there was no enterprise exercise at that tackle.

The mortgage funds had been disbursed to financial institution accounts that McClellon had arrange simply days earlier than he made the mortgage purposes.  The proceeds had been then moved to a private checking account managed by McClellon.

McClellon is scheduled to seem for arraignment on the indictment on Might 31, 2022.  Financial institution fraud is punishable by as much as 30 years in jail.

The fees contained within the indictment are solely allegations.  An individual is presumed harmless until and till she or he is confirmed responsible past an inexpensive doubt in a court docket of regulation.

The case is being investigated by The FBI Seattle Area Division with help from FBI New York and the Small Enterprise Administration Workplace of Inspector Normal (SBA-OIG).

The case is being prosecuted by Assistant United States Lawyer Sok Tea Jiang.

On Might 17, 2021, the Lawyer Normal established the COVID-19 Fraud Enforcement Process Drive to marshal the sources of the Division of Justice in partnership with businesses throughout authorities to reinforce efforts to fight and stop pandemic-related fraud. The Process Drive bolsters efforts to research and prosecute essentially the most culpable home and worldwide legal actors and assists businesses tasked with administering reduction packages to forestall fraud by augmenting and incorporating present coordination mechanisms, figuring out sources and strategies to uncover fraudulent actors and their schemes, and sharing and harnessing info and insights gained from prior enforcement efforts. For extra info on the division’s response to the pandemic, please go to https://www.justice.gov/coronavirus.

Anybody with details about allegations of tried fraud involving COVID-19 can report it by calling the Division of Justice’s Nationwide Heart for Catastrophe Fraud (NCDF) Hotline through the NCDF Internet Criticism Type at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

mcclellon_indictment.pdf