Six people, including the owners of two defunct trucking companies, face multiple charges after federal prosecutors claim they submitted fraudulent loan applications to obtain $1.5 million in funds through the U.S. Small Business Administration’s Paycheck Protection Program (PPP).
The U.S. Department of Justice said Thursday that it has charged Rodericque Thompson, 43, of Atlanta, Micah K. Baisden, 30, of Doraville, Georgia, Travis C. Crosby, 31, of Wellford, South Carolina, Keith A. Maloney Jr., 33, of Port Wentworth, Georgia, Tabronx W. Smith, 43, of Buford, Georgia, and Thomas D. Wilson, 30, of Atlanta, with conspiracy to commit bank fraud, bank fraud, false statements to a financial institution and money laundering. Georgia resident Antonio Hosey is listed as a co-conspirator in the court filing.
The indictment was filed in the U.S. District Court for the Northern District of Georgia on Jan. 12, according to the DOJ statement. The six individuals who have been charged are allegedly part of a larger group that fraudulently obtained around $3 million in PPP loans, according to court filings.
So far, federal investigators have recovered nearly $1.2 million of the stolen money, the DOJ said.
According to court filings, Thompson allegedly recruited and helped Baisden, Crosby, Maloney, Wilson and Smith fill out the paperwork to obtain fraudulent $300,000 loans on behalf of their respective businesses in exchange for a percentage of the loan proceeds.
Prosecutors said the business owners conspired to submit the fraudulent PPP loan applications by falsifying the number of employees — each listed 16 — and the average monthly payroll expenses of $120,000 for each of the five businesses.
Crosby filed a PPP loan application for his trucking business, Faithful Transport Services LLC, headquartered in Bamber, South Carolina, on May 16. According to the Federal Motor Carrier Safety Administration website, the carrier’s operating authority was revoked in March. He also previously owned another trucking company, TLC Transport Services, but its authority was revoked in February 2019.
Maloney is listed as the owner of South Carolina-based KMJ Transport LLC, but no data about the carrier was available on the FMCSA’s website.
“The trucking companies that were indicted were legitimate companies, but we don’t know the extent of their business in terms of how many trucks they were running,” a Department of Justice source told FreightWaves. “We do know that they didn’t have the number of employees or the wage amounts that they listed on their loan applications.”
According to court documents, Baisden owns PowerHouse Sports Academy in Doraville, Smith owns Market Yourself LLC in Norcross, Georgia, and Wilson owns Rare Breed Nation LLC, an independent record label in Atlanta.
Once the money was deposited into their accounts, the business owners used the funds for unauthorized purchases, including making checks out to individuals who were not employees, court documents allege.
An additional $284 billion in forgivable PPP loans through the SBA opened up to lenders on Jan. 12.
John Gallagher contributed to this report.
This is a developing story.