Knoxville, Tenn. – On January 13, 2022, James Waylon Howell, 39, of Knoxville was sentenced to 18 months in prison by the Honorable R. Leon Jordan, in the United States District Court for the Eastern District of Tennessee in Knoxville.
Howell pleaded guilty to committing more than $150,000 in fraud related to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and engaging in money laundering.
“This lawsuit underscores the Department of Justice’s commitment to aggressively prosecute those who defrauded these important programs established to provide economic relief to those who have suffered financially as a result of the COVID-19 pandemic,” said U.S. Attorney Francis M. Hamilton III. . “Fortunately, the quick and competent work of our federal partners resulted in the recovery of a substantial amount of stolen funds.”
“Our office will continue to investigate those who fraudulently take advantage of coronavirus relief funding available to help others during the pandemic and bring them to justice,” said FBI Special Agent in Charge Joe Carrico.
“While businesses suffered and did their best to weather the pandemic, others chose greed,” said Brian Thomas, IRS Assistant Special Agent for Criminal Investigation. “IRS-CI will continue to use its financial expertise to track and recommend prosecutions against criminals profiting from a crisis.”
The CARES Act is a federal law enacted in March 2020 to provide emergency financial assistance to millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. The two main sources of assistance provided by the CARES Act were the Paycheck Protection Program (“PPP”) and the Economic Disaster Loan (“EIDL”) program. PPP loans consisted of more than $640 billion in small business forgivable loans for payroll, mortgage interest, rent and utilities. The EIDL program provided low-interest loans to business owners to pay for items such as accounts payable and other bills that could not be paid due to COVID-19.
As stated in the plea agreement filed by the defendant, from April 2020 to June 2020, Howell fraudulently applied for four loans totaling $154,700 through the PPP and EDIL programs. Howell submitted fraudulent claims under the names of two companies that were ineligible for the COVID-19 relief funds requested by Howell. Howell submitted two fraudulent claims to financial institutions seeking PPP funds and two fraudulent claims to the Small Business Administration seeking EIDL funds. As part of his fraudulent scheme, Howell submitted false supporting documents, including documents from the Internal Revenue Service, and made false statements about the number of people employed by the companies, the revenues generated and the salaries paid. . Howell also made misrepresentations about the business entities and the intended use of the loan proceeds.
For example, according to the plea agreement, on April 1, 2020, Howell submitted an online request to the Small Business Administration on behalf of Advanced Strategy Holdings, LLC, requesting $83,800 in EIDL funds. On the application and in the supporting documents Howell submitted to the SBA in support of the loan, Howell claimed that Advanced Strategy Holdings employed four people, generated $700,000 in gross revenue, incurred $0 in cost of goods sold and was paying salaries of $440,000 in the twelve months before the COVID-19 pandemic. These claims were all false.
This case is the result of an investigation by the FBI and the Internal Revenue Service – Criminal Investigation.
Assistant United States Attorney William A. Roach, Jr., who is also the Bureau’s coronavirus fraud coordinator, prosecuted the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to mobilize Department of Justice resources in partnership with government agencies to scale up enforcement and prevention efforts. pandemic-related fraud. The task force strengthens efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies administering relief programs to prevent fraud, among other methods, by increasing and integrating coordination mechanisms existing ones, identifying resources and techniques to uncover fraudulent actors and their agendas, and sharing and leveraging information and knowledge gained from previous enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about alleged 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 through the complaint form online from NCDF at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.