Two individuals from Georgia have received prison sentences for their roles in a wire fraud and money laundering scheme involving the wrongful acquisition of COVID-19 relief funds meant for distressed businesses during the pandemic. James Frank Austin, 51, from Americus, and Rosalind Way, 40, from Milledgeville were sentenced to over five years each and have been ordered to pay substantial amounts in restitution for their crimes, according to the U.S. Department of Justice.
On Aug. 27, Austin pleaded guilty to one count of conspiracy to commit wire fraud, two counts of bank fraud, and two counts of money laundering. Way was convicted on Sept. 24 after a three-day trial of one count of conspiracy to commit wire fraud and one count of money laundering. The prosecution asserted that instead of applying the funds for the intended purpose – to aid struggling businesses – they personally misappropriated the money, including luxury vehicles as part of their indulgences. U.S. District Judge Marc Treadwell handed the sentences down on Dec. 2, making clear there is no parole in the federal system.
"Using stolen taxpayer dollars to purchase a Bentley and other luxury goods at a time of national emergency is wrong, pure and simple, and won’t be tolerated in the Middle District of Georgia," U.S. Attorney William R. “Will” Keyes said. IRS Criminal Investigation Special Agent in Charge Demetrius Hardeman added that “The sentences they received today send an important message that IRS Criminal Investigation special agents and our law enforcement partners will continue investigating and holding those who committed fraud on the COVID-19 programs accountable,” as noted by the same press release.
Documents and evidence from the trial revealed that Austin and Way were accused of inflating employee numbers and payrolls to obtain PPP loans, one for Propel Opportunity Fund and another for the Austin Smith Center for Community Development (ASCCD). The IRS records clearly showed claimed salaries and wages were not paid by Propel, according to the prosecution's case. Austin managed to improperly obtain a total of $2,078,210 in fraudulent PPP loans, with funds being spent on lavish personal expenses. Both defendants are now tasked with paying restitution totalling over two million dollars back to the SBA, a debt reflecting the weight of their financial deceptions during a time when those funds were desperately needed elsewhere.
For those with information about attempted fraud involving COVID-19 relief efforts, the Justice Department's National Center for Disaster Fraud (NCDF) Hotline can be contacted. This case was investigated by the FBI and the IRS, highlighting the serious approach federal agencies are taking to pursue and prosecute pandemic-related fraud. The intricacies of the scheme and its bust can be read in further detail via the Justice Department's official announcement.
