CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that New Hampshire-based North American Specialty Insurance Company (NAS IC) has agreed to resolve allegations that the company violated the False Claims Act by bonding a South Carolina general contractor that submitted false claims to the United States for services performed under fraudulently obtained contracts from the U.S. Department of Defense and the U.S. Department of Agriculture.  These contracts had been set aside for companies that qualified for the U.S. Small Business Administration’s (SBA) Section 8(a) Business Development Program.  NAS IC has agreed to pay $1,040,035.20 to resolve the government’s allegations. 

The 8(a) Business Development Program was created to help provide a level playing field for small businesses owned by socially and economically disadvantaged people or entities. A business owned and controlled by socially and economically disadvantaged individuals can apply for certification from the SBA as an 8(a) business.  An 8(a) business can obtain certain preferences during the contracting process, and can bid on contracts that the government has set aside for qualified 8(a) businesses.  A business can remain in the 8(a) program for up to nine years, but during that time, must provide information to the SBA, which is used to determine continuing program eligibility. 

The United States alleges that, among other things, South Carolina general contractor Claro Company, Inc. made materially false, fictitious, and fraudulent statements and representations, or material omissions, to gain entry into and to continue participation in the 8(a) program.  The United States also alleges that NAS IC knew or should have known that Claro was not eligible for 8(a) set-asides.  Specifically, the United States alleges that NAS IC knew or should have known that Claro Company was in violation of the regulations governing the 8(a) Program and the government’s contracting requirements.  Specifically, the United States contends that NAS IC knew or should have known, among other things, that: Claro Company was not controlled by a socially and economically disadvantaged individual, and that it was affiliated with and controlled by another entity and/or individuals that did not meet the SBA’s definition of being socially and economically disadvantaged; that neither the affiliation nor control were disclosed to the SBA; and that Claro Company made material false misrepresentations regarding its financial status to the SBA in order to avoid early graduation from the 8(a) program.  The United States contends that NAS IC nonetheless continued to do business with Claro Company, bonding its projects and therefore allowing it to continue to fraudulently bid for contracts under the preferences in the 8(a) program. 

“By enabling fraudsters, these companies play a key part in unlawfully usurping government contract opportunities from socially and economically disadvantaged individuals who the 8(a) Program is intended to assist,” said U.S. Attorney Murray.  “My office will pursue vigorously bonding companies and other entities that, by turning a blind-eye or willfully ignoring blatant indicia of program fraud or abuse, enable the submission of these false claims and cause harm to the government program.”

This settlement resolves allegations investigated by the government pursuant to the False Claims Act.  The settlement is the result of the coordinated effort between the Defense Criminal Investigative Service of the Office of Inspector General, U.S. Department of Defense, the U.S. Department of Agriculture Office of the Inspector General, the U.S. Small Business Administration Office of the Inspector General, and the United States Attorney’s Office for the Western District of North Carolina.

The claims resolved in this settlement are allegations only and there has been no determination of liability against NAS or any other entity. 

CHARLOTTE, N.C. – A federal grand jury in Charlotte has indicted three individuals for conspiring to fraudulently obtain more than $1 million in COVID-19 relief funds administered by the Small Business Administration (SBA) through the Paycheck Protection Program (PPP), announced Dena J. King, U.S. Attorney for the Western District of North Carolina.

Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service, which oversees Charlotte, and Mark H. Morini, Special Agent in Charge of the Treasury Inspector General for Tax Administration (TIGTA), Southeast Field Division, join U.S. Attorney King in making today’s announcement.

According to allegations in the federal indictment, between March and November 2021, Tamakia Elizabeth Harris, 43, Shavondra Michelle White, 39, and Cedric Lee Benton, 47, all of Charlotte, conspired with each other to fraudulently obtain more than $1 million in COVID-19 relief funds, by submitting fraudulent PPP loan applications to financial servicing companies outside North Carolina. The indictment alleges that the PPP loan applications contained false and misleading information and fraudulent supporting documentation, including fake federal tax filings and payroll reports.

As alleged in the indictment, Harris, who was employed by a nationally chartered bank in Charlotte, generally charged fees between $2,000 and $5,000 for her assistance in filing false and fraudulent PPP loans. Harris allegedly created counterfeit IRS forms for nonexistent businesses and inflated income to qualify the borrower for the highest amount of PPP loan. Harris then allegedly submitted the fraudulent PPP loan applications and supporting documents to the financial servicing companies. The indictment alleges that, in total, Harris assisted in creating and submitting over 30 fraudulent PPP loan applications totaling more than $900,000.

According to allegations in the indictment, White, who was also employed by a nationally chartered bank in Charlotte, electronically filed two PPP loans in her own name using forged and fictitious federal income tax documents prepared by Harris. arris The indictment alleges that White, Benton, and another individual received more than $100,000 in PPP loans that they were not entitled to receive.

The indictment further alleges that Benton, who is White’s boyfriend and has a prior criminal conviction, also submitted two fraudulent PPP loan applications with fictitious and forged IRS forms, or income he purportedly lost while in the custody of the Bureau of Prisons (BOP).

The defendants are each charged with one count of wire fraud conspiracy, which carries a maximum penalty of 20 years in prison. One or more of the defendants are also charged in 16 separate counts of wire fraud – each relating to a specific PPP loan – which also carry a maximum penalty of 20 years in prison per count.

The charges in the indictment are allegations. The defendants are innocent unless and until proven guilty beyond reasonable doubt in a court of law.

In making today’s announcement, U.S. Attorney King thanked the USPIS and TIGTA for their investigation of this case.

Assistant U.S. Attorney Michael E. Savage, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. Members of the public in the Western District of North Carolina are also encouraged to call 704-344-6222 to reach their local Coronavirus Fraud Coordinator.

 

ALEXANDRIA, Va. – An Arlington-based business owner pled guilty yesterday to wire fraud in connection with his scheme to defraud eight companies of over $2 million.According to court documents, from at least January 2020 through December 2022, Kiel Brendan Brandt, 34, owned and operated Epsilon Acquisition Services, a mergers and acquisitions advisory firm. From at least February 2021 through December 2022, Brandt defrauded companies and individuals by lying about the status of deals and the state of Epsilon’s finances, by falsely claiming that Epsilon would refund fees if deals did not close, and by falsely claiming that refunds had been or imminently would be issued.When Brandt failed to secure funding and deals did not close, Brandt falsely claimed that the deals were delayed because the lenders and/or partners needed additional due diligence materials, insurance records, or other documentation.For example, a client company in Argentina paid Epsilon approximately $275,000 in refundable payments and fees to find a buyer to purchase the company. Brandt never closed the deal, but rather than repaying the funds, he told the company that the bank was having payment processing issues, that there were delays in the money posting to the account, that the bank was unable to timely send the funds because of a bank holiday, and that the delays were because of technical complications in transferring funds overseas. To make his supposed efforts appear legitimate, Brandt initiated a transfer from his bank and obtained a confirmation order, but he then canceled the transfer before any of the money was sent from his account. Brandt, nonetheless, sent the confirmation number to the company.Brandt further obfuscated the scheme by suggesting there had been an internal miscommunication at Epsilon with an employee named “Steph” regarding from which account the transfer should be initiated. In truth, “Steph” was a fictitious employee who did not exist. Brandt also suggested that the company could help facilitate the transfer of funds by opening a U.S. bank account. When that did not result in a refund payment, Brandt communicated that he would open a bank account in Central America from which he would make payment. Approximately a year-and-a-half after the company first sought repayment of its funds, Brandt signed and executed a contract acknowledging that Epsilon had failed to return money held in escrow as well as other refundable fees. Brandt again falsely promised to repay a portion of the $225,000 that he owed the company by September 9, 2022, but did not send any money.In September 2021, another company agreed to provide Epsilon with a $1 million bridge loan to facilitate transactions for the company. In the loan agreement, Brandt falsely represented Epsilon’s debts, hiding that Epsilon owed hundreds of thousands of dollars to other victims. Rather than using the funds for their intended purpose, Brandt directed over $700,000 in repayments to other clients to whom he owed money and used the remaining funds primarily for transfers to employees and payments to personal accounts.Brandt also solicited upfront fees by various names including “good faith deposits,” “loan commitment fees,” “insurance fees,” and “prepayments of commissions.” As with the bridge loan, however, rather than directing the funds towards their intended uses, Brandt directed payments to Epsilon’s operating expenses, and made sizeable payments to his personal bank accounts. Brandt also used payments from victims to pay other victims and clients.In total, Brandt defrauded eight companies of $2,002,750 and he repaid the victims only $193,323. Epsilon also failed to repay $175,000 in advances to a ninth company. In his plea agreement, Brandt agrees to pay $1,984,426 in total restitution.Brandt is scheduled to be sentenced on April 3, 2025, and faces up to 20 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Sean Ryan, Special Agent in Charge of the FBI Washington Field Office's Criminal and Cyber Division, made the announcement after U.S. District Judge Patricia Tolliver Giles accepted the plea.Assistant U.S. Attorneys Jack A. Morgan and Kenneth R. Simon Jr. are prosecuting the case.A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:24-cr-250.

CHARLOTTE, N.C. – United States Attorney Dena J. King announced that she will step down from her position as the Western District’s chief law enforcement officer effective today.“It has been a tremendous honor to serve the people of the Western District of North Carolina,” said U.S. Attorney King. “I’ve had the privilege of working alongside some of the most talented public servants who are dedicated to serving our communities with integrity, distinction, and excellence. Our collective mission is to serve and protect the people of Western North Carolina. I stand proud of our accomplishments and our efforts to support law enforcement, build strong partnerships with our communities, and uphold justice.”U.S. Attorney King is the first person of color to be appointed to the position in the Western District of North Carolina (WDNC). She was nominated by President Joseph R. Biden Jr. on September 28, 2021, and was confirmed by the United States Senate on November 19, 2021. U.S. Attorney King was officially sworn into the position on November 29, 2021.During her tenure, U.S. Attorney King led an office of nearly 100 federal prosecutors and support personnel, serving a district that covers 32 counties across the western part of the state. The WDNC also includes half of the Great Smoky Mountains National Park and the Blue Ridge Parkway. The Pisgah and Nantahala National Forests cover over one million acres of the Western District. The largest Native American Community in the eastern half of the United States, the Eastern Band of Cherokee Indians, is in WDNC.As the chief federal law enforcement officer, U.S. Attorney King was in charge of all criminal and civil matters filed in the U.S. District Court in the Western District of North Carolina. Under U.S. Attorney King, the Office focused its efforts on the protection of civil rights; enhancing public safety; recovering taxpayer dollars; combatting health care fraud, financial fraud and COVID-19 fraud; disrupting drug trafficking and gun trafficking networks; uncovering public corruption and financial fraud schemes; protecting vulnerable populations from exploitation including older adults and children; prosecuting human traffickers and supporting victims; pursuing repeat offenders and drivers of violent criminal activity; and overseeing affirmative civil enforcement actions and all other civil litigations.During her time in office, U.S. Attorney King formed WDNC’s first ever Civil Rights Team, to focus on the enforcement of civil rights laws, prosecute individuals who commit criminal civil rights violations, ensure equal access to justice and equal opportunities by pursuing civil enforcement actions, and protect voting rights and access and rights of the disabled. In addition to enforcement efforts, the Civil Rights Team has enhanced the Office’s engagement with the community to raise awareness and to encourage reporting of potential civil rights violations.U.S. Attorney King also reconstituted the Western District’s Health Care Fraud Task Force, a multi-agency team that comprises federal and state law enforcement agencies and regulatory entities. The goal of the task force is to identify and prosecute those who defraud public and private insurers, jeopardize the integrity of the health care system and waste taxpayer dollars. The work of the task force has led to an increase in criminal and civil matters, and has secured settlements with corporations and individuals, including hospitals, telemedicine companies and providers, durable medical equipment suppliers, physicians, therapists, and affiliated health care professionals. In addition, the task force has recovered millions in restitution for the government-funded programs, including Medicare and Medicaid.  U.S. Attorney King also prioritized the protection of vulnerable populations from exploitation and violence. Under her leadership, the Office successfully prosecuted numerous child predators, ensuring justice for victims and securing restitution for victims of sexual exploitation. The Office also took significant steps to protect older Americans from financial exploitation, by bringing to justice those who prey on the elderly and conducting educational and training events to raise public awareness about financial scams targeting older adults.U.S. Attorney King remained committed to enhancing public safety by focusing on identifying and dismantling extensive drug trafficking networks, which are often drivers of violent criminal activity. The Office also increased its efforts to reduce gun-induced violence by identifying and disrupting gun trafficking pipelines, prosecuting repeat offenders and felons in possession of firearms, and those involved in the illegal sale or purchase of firearms.Throughout U.S. Attorney King’s tenure, the Office also prioritized strengthening partnerships with federal, state, and local law enforcement agencies and community stakeholders through training seminars on Department of Justice priorities and U.S. Attorney’s Office initiatives, as well as in response to community needs to include violent crime, civil rights, and human trafficking.“Serving as U.S. Attorney has given me the privilege of working alongside our dedicated federal, state, and local law enforcement partners on prosecutions, crime prevention efforts, and outreach initiatives,” said U.S. Attorney King. “I am grateful for the support of these agencies, which will continue to serve and protect our communities long after my tenure. I also want to thank the countless agents, officers, and deputies whose commitment and extraordinary service enhance the safety of our communities and help bring offenders to justice.” In addition to overseeing federal cases and conducting trainings, U.S. Attorney King engaged in outreach and crime prevention efforts, including initiatives to enhance public safety and strengthen community engagement. Among them is Think Again, a campaign aimed at preventing illegal firearm purchases and reducing gun violence. U.S. Attorney King also prioritized the fight against hate crimes through the United Against Hate initiative, a Department of Justice-led effort designed to strengthen relationships between law enforcement and historically targeted communities.A key focus of U.S. Attorney King during her tenure was engaging with young people to prevent youth violence and foster positive youth development. U.S. Attorney King’s Office partnered with Charlotte-Mecklenburg Schools (CMS), Buncombe County and City of Asheville Schools, and Cherokee Central Schools to engage with students on important issues such as school violence, teen dating violence, effective leadership, and positive conflict resolution. U.S. Attorney King also participated in numerous public events and partnered with youth community organizations, where she spoke on topics of crime prevention, mentorship, and collaborating with law enforcement.“As U.S. Attorney, I’ve had the privilege of meeting and interacting with countless members from communities throughout the Western District, including young people. I am extremely grateful to all our community partners for their collaboration and partnership. None of this work would be possible without the support of our community partners and the citizens who stand behind these efforts. I am deeply grateful for their support and for their commitment to our outreach initiatives, particularly those that focus on helping our young people navigate their challenges in a positive and constructive manner.”In addition to serving as U.S. Attorney for WDNC, U.S. Attorney King served as Chair of the Civil Rights Subcommittee and Native American Issues Subcommittee of the Attorney General’s Advisory Committee (AGAC) of U.S. Attorneys, as well as the Juvenile Violence Subcommittee. “It’s been a privilege to serve as Chair on these two very important subcommittees and an incredible opportunity to provide input on key issues to Department of Justice leadership,” said U.S. Attorney King, who also served as a member of the AGAC’s subcommittees for Violent and Organized Crime; Law Enforcement, Victims and Community Relations; and Elder Justice. Since 2021, U.S. Attorney King successfully steered the office through significant challenges, including the COVID-19 pandemic and unprecedented budgetary cuts. In spite of these challenges, the Office maintained its ability to manage a large caseload and secure additional resources, including prosecutors and support personnel.Before her appointment, U.S. Attorney King served as WDNC’s Deputy Criminal Chief, overseeing the Violent Crimes and Narcotics Section, and as Lead Task Force Attorney for the Organized Crime Drug Enforcement Task Force program. U.S. Attorney King’s extensive prosecutorial experience also includes serving as an Assistant U.S. Attorney for the U.S. Attorney’s Office in the Eastern District of North Carolina, an enforcement attorney in the Securities Division of the North Carolina Department of the Secretary of State, and an Assistant District Attorney in Mecklenburg County.“Being U.S. Attorney is an incredible job,” said U.S. Attorney King. “It’s been an honor and a privilege to have served in this role and I will always be incredibly thankful for the opportunity.”Upon U.S. Attorney King’s departure, First Assistant U.S. Attorney Lawrence J. Cameron will serve as Acting U.S. Attorney until a replacement is named.