Seventeen New York City And State Public Employees Charged With Fraudulently Obtaining Pandemic Relief Loans

 

Nineteen Defendants Total Charged with Allegedly Submitting Fraudulent Applications for U.S. SBA Paycheck Protection Program and Economic Injury Disaster Loans, Most of Whom Were Currently or Previously Employed by New York City or New York State

Damian Williams, the United States Attorney for the Southern District of New York, Thomas M. Fattorusso, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Amaleka McCall-Brathwaite, Eastern Region Special Agent in Charge of the U.S. Small Business Administration, Office of Inspector General (“SBA-OIG”), announced today the unsealing of a Complaint charging RODNEY SMITH, DENISE GANT, EBONY SIMON, PHYA SCOTT, PRISCILLA JACKSON, SHARON CHARLES, YOLANDA LAWRENCE, YOLANDA RATCLIFF, and ZHANE RATCLIFF with conspiring to commit wire fraud by submitting fraudulent SBA loan applications, as well as Complaints charging BRANDON BOYLE, DELILAH CUMMINGS, VASHAWN FOREMAN, TREVOR GORDON, DIONE HALL, TONI MCCULLOUGH, JAROD OTTLEY, RONETTE SHORT, EDWIN SKEPPLE, and WALTER SUSSWELL individually with wire fraud for submitting fraudulent loans under the SBA’s Economic Injury Disaster Loan (“EIDL”) program and/or its Paycheck Protection Program (“PPP”).  Most of the defendants were arrested this morning. BOYLE, CUMMINGS, FOREMAN, GORDON, HALL, MCCULLOUGH, OTTLEY, SHORT, SKEPPLE, and SUSSWELL will be presented this afternoon before Magistrate Judge Stewart D. Aaron in Manhattan federal court.  SMITH, GANT, CHARLES, LAWRENCE, YOLANDA RATCLIFF, and ZHANE RATCLIFF will be presented this afternoon before Magistrate Judge Sarah Netburn in Manhattan federal court.  SIMON, SCOTT, and JACKSON are not in custody.

U.S. Attorney Damian Williams said: “Scheming to steal Government funds intended to help small businesses weather a national emergency is offensive.  And, as public employees, these folks should have known better.  This Office will continue to prosecute those who use fraud to line their pockets with taxpayer money.”

IRS-CI Special Agent in Charge Thomas M. Fattorusso said: “Of those arrested today are civil servants, NYPD employees, and a Captain for the Department of Corrections.  These are individuals who held positions of trust and had strong, stable jobs while so many people struggled during the pandemic.  The message that these arrests are sending should be a clear one. Nobody is above the law and while the pandemic has receded from the headlines, IRS-CI’s commitment to bringing those who defrauded these programs to justice remains unwavering.”

SBA-OIG Special Agent in Charge Amaleka McCall-Brathwaite said: “It is especially egregious when individuals that hold positions of public trust engage in criminal activity.  OIG is committed to rooting out bad actors and protecting the integrity of SBA programs.  I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”

According to the 11 Complaints unsealed today in Manhattan federal court and publicly available information:[1]

RODNEY SMITH, DENISE GANT, EBONY SIMON, PHYA SCOTT, PRISCILLA JACKSON, SHARON CHARLES, YOLANDA LAWRENCE, YOLANDA RATCLIFF, and ZHANE RATCLIFF, together with others known and unknown, conspired together to obtain fraudulent SBA loans.  GANT, SIMON, SCOTT, YOLANDA RATCLIFF, and ZHANE RATCLIFF were each employees of the New York City Police Department (the “NYPD”); LAWRENCE was an employee of the New York City Human Resources Administration; JACKSON was an employee of the Metropolitan Transit Authority; and CHARLES was an employee of a non-profit organization in New York City.  During the summer of 2020, they each conspired with SMITH and others to submit fraudulent applications for loans to the SBA’s EIDL program.  The fraudulent loan applications submitted in the names of the defendants made similar false claims about gross revenues and number of employees, and many of the applications claimed that the defendants operated hair and nail salons.  Many of the defendants paid kickbacks to SMITH and/or other members of the conspiracy after their fraudulent loans were funded.

BRANDON BOYLE, DELILAH CUMMINGS, VASHAWN FOREMAN, TREVOR GORDON, DIONE HALL, TONI MCCULLOUGH, JAROD OTTLEY, RONETTE SHORT, EDWIN SKEPPLE, and WALTER SUSSWELL each submitted one or more fraudulent applications for loans under the SBA’s PPP and/or EIDL program.  BOYLE and SUSSWELL worked for the NYPD; CUMMINGS, MCCULLOGH, and FOREMAN worked for the New York City Department of Education; SKEPPLE worked for the New York City Department of Corrections; GORDON had recently retired from the New York City Department of Corrections; OTTLEY worked for the New York City Department of Transportation; and SHORT worked for the New York City Administration for Children’s Services.  Frequently, the applications for these defendants, which were submitted at various times in 2020, were on behalf of purported sole proprietorships in the defendants’ own names.  In support of their fraudulent loan applications, the defendants claimed six-figure gross revenues for businesses that actually earned far less, if they existed at all.  Many defendants claimed employees that they did not actually have, and many spent the proceeds of their loans on personal expenses, including in-person gambling at casinos, online gambling, personal stock investments, home furniture and electronics, and luxury clothing items.

Across all of these schemes, the defendants collectively stole more than $1.5 million from the SBA and financial institutions that issued SBA-guaranteed loans and intended or attempted to steal hundreds of thousands of dollars more.

RODNEY SMITH, 54, DENISE GANT, 52, EBONY SIMON, 45, PHYA SCOTT, 51, PRISCILLA JACKSON, 41, YOLANDA LAWRENCE, 48, and ZHANE RATCLIFF, 27, all of Brooklyn, New York, SHARON CHARLES, 56, of Queens, New York, and YOLANDA RATCLIFF, 48, of Inwood, New York, are each charged with conspiracy to commit wire fraud and wire fraud.  Each of those charges carries a maximum penalty of 20 years in prison.  SMITH is also charged with a single count of aggravated identity theft, which carries a mandatory two-year consecutive sentence.  VASHAWN FOREMAN, 40, DIONE HALL, 55, and WALTER SUSSWELL, 28, all of Queens, New York, DELILAH CUMMINGS, 37, TREVOR GORDON, 66, TONI MCCULLOUGH, 39, and RONETTE SHORT, 40, all of Brooklyn, New York, BRANDON BOYLE, 31, of New York, New York, JAROD OTTLEY, 57, of Valley Stream, New York, and EDWIN SKEPPLE, 40, of West Nyack, New York, are each charged with wire fraud, which carries a maximum penalty of 20 years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding work of the Special Agents of the U.S. Attorney’s Office and agents from the IRS-CI and the SBA-OIG.  Mr. Williams also thanked the NYPD’s Internal Affairs Bureau and the New York City Department of Investigation for their assistance in the investigation of these cases.

The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 [1] As the introductory phrase signifies, the Complaints and the descriptions of the Complaints set forth herein constitute only allegations, and every fact described should be treated as an allegation.