$1.7 Million Paycheck Protection Program Loan Fraud: A Pennsylvania Man’s Complaint
The United States Attorney for the Middle District of Pennsylvania, Philip R. Sellinger, announced today that charges have been brought against a Pennsylvania man for his role in a scheme to fraudulently obtain over $1.7 million in federal Paycheck Protection Program (PPP) loans for himself and others.
the lawsuit against Darryl Duanne Young
A lawsuit has been filed against Darryl Duanne Young, also known as “Darryl Duanne Isom Young,” who is 59 years old and from Kingston, Pennsylvania. The complaint accuses Young of one crime of conspiracy to conduct bank fraud, four counts of bank fraud, and two counts of money laundering. This afternoon, United States Magistrate Judge Cathy L. Waldor presided over Young’s initial appearance, which took place by videoconference. During his appearance, the judge decided to release Young on an unsecured bond of $150,000.
According to the statements made in court and the papers that were submitted in this case:
On March 29, 2020, Congress passed the Coronavirus Assistance, Relief, and Economic Security Act (CARES Act) to help the millions of Americans who are struggling financially due to the COVID-19 pandemic. The law was named after its acronym. Via the Paycheck Protection Program, the law made it possible for small enterprises to receive forgiven debts of up to $349 billion for the purpose of preserving jobs and covering certain other costs. Almost three hundred and fifty billion dollars worth of extra Paycheck Protection Program funding was given the green light by Congress in April 2020.
False claims to obtain PPP ( Paycheck Protection Program ) loans
Young participated in a plot to fraudulently obtain approximately $1.7 million in PPP loans for himself and his co-conspirators by making a number of false claims to several financial institutions. Young is responsible for submitting fake PPP loan applications and directing others to do the same. In support of his PPP loan applications, he defrauded a victim lender by submitting tax documents and bank statements that had been forged. He was given approximately 230,000 dollars in PPP loans for the companies that he managed, and he was also given a part of the loan earnings for his assistance in submitting false applications on behalf of others.
Penalties for money laundering
Both counts of conspiring to commit bank fraud, as well as actual bank fraud, have the potential for a sentence of up to 30 years in prison as well as a fine of $1 million. The potential penalties for each count of money laundering include a maximum sentence of ten years in prison and a maximum fine of two hundred and fifty thousand dollars, or double the amount of the gross gain to the offender or the gross loss to the victim, whichever is greater.
Investigation
U.S. Attorney Sellinger credited special agents of the IRS-Criminal Investigation, who were working under the direction of Acting Special Agent in Charge Tammy Tomlins; postal inspectors of the United States Postal Inspection Service in Newark, who were working under the direction of Inspector in Charge Damon Wood, Philadelphia Division; special agents of the Social Security Administration, Office of the Inspector General, who were working under the direction of Special Agent in Charge Sharon MacDermott; and special agents of the United States Attorney’s Office.
Assistant United States Attorneys Katherine M. Romano and David E. Dauenheimer of the Health Care Fraud Section in the United States Attorney’s Office in Newark are the ones representing the government in this case.
What is the Paycheck Protection Program (PPP)?
In 2020, under President Donald Trump, the United States Congress passed the Coronavirus Assistance, Relief, and Economic Security Act, which authorized the federal government to create the Paycheck Protection Program (PPP), a small company financing program (CARES Act). The program’s goal is to ensure that employees of qualifying firms, sole proprietors, self-employed individuals, nonprofits, and tribal organizations continue to be compensated for their services. An estimated $953 billion will be spent on the project overall.
The Paycheck Protection Program makes it possible for organizations to make an application for low-interest private loans in order to cover their payroll and a variety of other obligations. Paycheck Protection Program loans often have a maximum amount that is close to equivalent to 2.5 times the applicant’s typical monthly salary costs. In some circumstances, an applicant may be selected for a second draw that is normally of the same value as the first.
The loan funds may be used to cover payroll expenditures, rent, interest, and utilities. The loan may be partially or totally repaid if the business keeps its employee counts and employee wages consistent. The program is implemented by the U.S. Small Business Administration. The PPP loan application period closed on March 31, 2021, and the deadline has passed.
Amount of the PPP ( Paycheck Protection Program )Loan
The applicant’s payroll costs will determine how much of a Paycheck Protection Program loan they are eligible for.
Employee remuneration in the form of salary, wages, commissions, cash tips, paid leave, severance pay, clergy parsonage and housing allowance, and other types of compensation are included in payroll costs. These charges are capped at a yearly total of one hundred thousand dollars for each employee. In addition, the prices of group health benefits, insurance, and retirement benefits are included in payroll costs.
Taxes that are withheld from employees’ wages and any and all state and local taxes that are assessed on compensation are included in payroll costs. However, the employer’s portion of the social security tax, the employer’s portion of the Medicare tax, and the federal unemployment tax are not included in payroll costs. In the event of a sole proprietorship, an independent contractor, or a person who is self-employed, payroll costs include net profits from self-employment. This calculation is based on line 31 of the 2019 Form 1040, Schedule C, and it is capped at a yearly amount of $100,000.
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