Three Georgians Sentenced for $11 Million PPP Fraud Scheme During COVID-19

Three Georgians Sentenced for  Million PPP Fraud Scheme During COVID-19

Teldrin Foster, John Gaines, and Carla Jackson have been sentenced for their roles in a scheme to steal Paycheck Protection Program (PPP) funds during the COVID-19 pandemic. A total of 23 individuals have been convicted and sentenced in connection with the fraudulent scheme.

U.S. Attorney Ryan K. Buchanan stated, “Foster, Gaines, and Jackson, together with 20 other defendants who have already been sentenced for their participation in this criminal scheme, took advantage of a relief program designed to keep small businesses afloat during the COVID-19 pandemic.” He emphasized that their sentences highlight that fraud against the government will not be tolerated.

Keri Farley, Special Agent in Charge of FBI Atlanta, noted, “COVID-19 disaster relief loans were issued by the government to help businesses struggling to survive during a pandemic, not to use for personal pleasures like these defendants used them for.” She affirmed the FBI’s commitment to holding those accountable who abused taxpayer dollars.

Demetrius Hardeman, Special Agent in Charge of IRS Criminal Investigation, Atlanta Field Office, added, “Those who took advantage of the COVID-19 pandemic relief programs are realizing from these sentences that even after four years since Congress enacted them, they are still being held accountable.”

According to court information, from April 2020 through August 2020, Foster worked with co-defendant Darrell Thomas and others to fraudulently obtain at least 14 PPP loans, totaling over $11 million. None of the businesses involved had employees or incurred payroll expenses, and the supporting documents submitted were fabricated.

Gaines obtained a fraudulent PPP loan of $806,710 for his business, Gaines Reservation and Travel, which had no employees or payroll expenses. Gaines provided fabricated bank statements to support the loan application and later disguised payments to Thomas as rent and payroll.

Jackson laundered over $300,000 of the stolen PPP funds into her business’s bank account. She falsely claimed the funds were for consulting fees, daily business management, and payroll services to help conceal the stolen PPP funds from federal law enforcement.

U.S. District Judge Jean-Paul “J.P.” Boulee sentenced the defendants as follows:

  • Teldrin Foster, 42, of Atlanta, Georgia: 10 years and one month in prison, three years of supervised release, and restitution of $9,606,627. Convicted of multiple counts of fraud and money laundering.
  • John Gaines, 59, of Marietta, Georgia: Five years and three months in prison, three years of supervised release, and restitution of $806,710. Pleaded guilty to one count of money laundering.
  • Carla Jackson, 56, of Tucker, Georgia: Three years in prison, two years of supervised release, and restitution of $335,238. Convicted of two counts of money laundering.

To date, 24 individuals have been charged in connection with the fraudulent scheme. The case is being investigated by the FBI and IRS Criminal Investigation, with prosecution by Assistant U.S. Attorneys from the Northern District of Georgia and a Trial Attorney from the Criminal Division’s Fraud Section.

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