Twin brothers in Maryland are facing federal charges for allegedly obtaining payouts totaling more than $1 million in COVID-19 unemployment insurance benefits and loans with which they used to buy a 2020 Camaro and trade cryptocurrency, according to the U.S. Department of Justice (DOJ).
Jerry Phillips and Jaleel Philips, both 24, are the targets of a federal complaint filed in court. Both are being accused of wire fraud, while Jerry is also accused of aggravated identity theft. The brothers appeared Wednesday in the United States District Court of Greenbelt, Maryland. They face up to 20 years in federal prison if convicted for wire fraud.
The complaint was announced by U.S. Attorney Erek L. Barron for the District of Maryland, as well as officials in the Federal Deposit Insurance Corporation and Department of Labor, according to a DOJ press release.
“According to the criminal complaint, IP addresses linked to Jaleel and Jerry Phillips were used to submit fraudulent Paycheck Protection Program loan applications (PPP), Economic Injury Disaster loan applications (EIDL), and unemployment insurance claims resulting in $1 million in received funds,” the presser said. “As stated in the affidavit in support of the criminal complaint, the Phillips brothers allegedly created fictitious aliases, used the personal identifying information of real people, and used out of business or fake corporate entities to apply for EIDL and PPP loans, and unemployment benefits.”
The federal complaint also alleges that the Philips brothers made email and financial account aliases with state social security numbers, birth dates, and driver’s licenses. It is alleged that a car was purchased after illegally obtaining the PPP funds, as well as furniture and other items, and that the brothers moved money between bank accounts that were through the aliases’ names.
Attorney General Merrick Garland announced a COVID-19 Fraud Enforcement Task Force in May 2021 to address fraud related to the pandemic and government handouts. A day before the Phillips brothers appeared in court, three men were sentenced in North Carolina for a $2.7 million relief fund scheme, according to the DOJ.
There has been large-scale fraud involved with coronavirus-related assistance. In one of the most significant cases, two Florida men crafted a $35 million scheme and pleaded guilty in December. The men recruited other loan applicants, resulting in more than two dozen being charged.
Nearly two years after the government approved aid totaling more than $6 trillion, the U.S. government is now tasked with accounting for where the funds ended up.
“Managing COVID-19 stimulus lending is the greatest overall challenge facing SBA, and it may likely continue to be for many years as the agency grapples with fraud in the programs, particularly in the COVID Economic Injury Disaster Loan (EIDL) Program, and the process of Paycheck Protection Program (PPP) loan forgiveness,” U.S. Small Business Administration (SBA) Inspector General Hannibal “Mike” Ware said in testimony last month before the House’s committee on small business.
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