Guilty Verdict Read in Massive $35M Fraud Scheme

Guilty Verdict Read in Massive $35M Fraud Scheme

(InformingNews.com) – The COVID-19 pandemic has hit many businesses hard. Lockdowns left some smaller operations fighting to keep their doors open. In an attempt to help them survive, the federal government disbursed funding through the Paycheck Protection Program (PPP). Unfortunately, two Florida men decided to take unfair advantage of the situation.

On December 14, James Stote and Phillip Augustin pleaded guilty to conspiracy to commit wire fraud charges. Prosecutors say the two men took funds from the PPP under the umbrella of Augustin’s company, Clear Vision Music Group LLC. They used fake documentation, including pay stubs, IRS forms and bank statements to file their claims.

They also recruited other people, on whose behalf they submitted falsified applications to secure more PPP loans. The pair took a cut of all disbursed funds for a total of at least $35 million.

Ohio Northern District First Assistant Attorney Michelle M. Baeppler said the men stole taxpayer money from people who really needed it to keep their struggling businesses alive. Department of Justice Assistant Attorney General Kenneth A. Polite Jr. stated the convictions prove the government will go after individuals who commit fraud under the PPP.

Twenty-five people have charges against them for participating in the scheme. Courts have convicted 20 accomplices so far, including Diamond Smith, who received a one-year, eight-month sentence on December 14. If convicted, Stote and Augustin could face up to 20 years in prison.

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