A mere two weeks ago we saw the first of what promises to be many, many PPP loan fraud charges when a pair of fine, upstanding gents from Rhode Island were nabbed by the Department of Justice. David A. Staveley, aka Kurt D. Sanborn, 52, of Andover, MA, and David Butziger, 51, of Warwick, RI, were charged with conspiring to seek forgivable loans guaranteed by the Small Business Administration, claiming to have dozens of employees earning wages at four different business entities when, in fact, there were no employees working for any of the businesses.
“Tens of millions of Americans have lost their jobs and have had their lives thrown into chaos because of the coronavirus pandemic. It is unconscionable that anyone would attempt to steal from a program intended to help hardworking Americans continue to be paid so they can feed their families and pay some of their bills,” said U.S. Attorney Aaron L. Weisman for the District of Rhode Island after the pair were charged. “Attorney General Barr has directed all U.S. attorneys to prioritize the investigation and prosecution of crimes related to coronavirus and COVID-19, and we are doing just that.”
Welp, we’ve got a new opportunist to add to the list, ladies and gentlemen. My bad, alleged opportunist.
Last week, the Department of Justice charged 37-year-old Maurice Fayne, aka Arkansas Mo, who appears on VH-1’s Love and Hip Hop: Atlanta. Admittedly I am way behind on my Love and Hip Hop lore, the last time I watched the show was way back when people were still trying to figure out if Joseline was really a man. Anyhoo. According to the DoJ complaint, Mr. Mo or whatever submitted a PPP application on April 15, 2020, as sole owner of a Georgia corporation called Flame Trucking. On his application, he claimed to have 107 employees and an average monthly payroll of $1,490,200. He requested a loan of $3,725,500 and certified that the loan proceeds would be used to “retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule.”
The bank he applied to went ahead and threw $2,045,800 his way. Within days, says the DoJ, Fayne allegedly used more than $1.5 million of the PPP loan proceeds to purchase $85,000 in jewelry, including a Rolex Presidential watch, a diamond bracelet, a 5.73 carat diamond ring for himself, and to pay $40,000 for child support.
When agents arrived at his home on May 11, they seized $80,000 in cash, including $9,400 that Fayne had in his pockets and jewelry he purchased with PPP funds. On top of that, they found a 2019 Rolls-Royce Wraith still with the temporary tags on it sitting in his driveway.
Here’s the funny part. Not funny haha, obviously. In a statement to the Washington Post, Fayne’s lawyer Tanya Miller says the government didn’t make it clear enough that PPP loans were meant for payroll and other legitimate business expenses and not, I dunno, jewelry and luxury cars.
“We will provide the appropriate response in the proper forum once all the information has been provided to us,” said Miller in the statement. “There has been considerable confusion among small business owners about PPP guidelines — particularly around the question of whether and how business owners are permitted to pay themselves a salary or owner’s draw. This ambiguity and confusion for business owners needs to be addressed immediately as the PPP program is still in its infancy.”
The MSRP for a 2019 Rolls-Royce Wraith starts at $320,500.
Back in June we told you about 