Six Essex County, New Jersey residents were arrested today for scheming to fraudulently obtain Paycheck Protection Program (PPP) loans, U.S. Attorney Philip R. Sellinger announced.
Federal officials said Mr. Nyan Terry, aka “Racks,” 23, of Irvington; Mr. Samir Jefferson, aka “Tank Jeffe,” 23, of Newark; and Mr. Nasir Williams, aka “Harlem Pete,” 29, Mr. Hymeen Reynolds, aka “Meen,” 21, Mr. Brian Brown, aka “Bizz,” 40, and Cadece Lapread, 35, all of East Orange, are each charged by complaint with one count of bank fraud.
Terry, Reynolds, Brown, Lapread, and Jefferson are also charged with one count each of bank fraud conspiracy.
The defendants made their initial appearances today before U.S. Magistrate Judge Jessica S. Allen; Terry was detained, and the other defendants were released on $20,000 each unsecured bond.
According to documents filed in this case and statements made in court:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted in March 2020 and was designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic.
One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the PPP.
To obtain a PPP loan, a qualifying small business was required to apply and provide information on its operations, including the number of employees and expenses.
In addition, businesses generally had to provide supporting documentation.
In April and May 2021, Terry, Jefferson, Williams, Reynolds, Brown, and Lapread schemed to defraud PPP lenders by submitting fraudulent PPP loan applications in the names of nonexistent small businesses, along with forged tax forms.
Based on the defendants’ misrepresentations, lenders approved at least three fraudulent PPP loans and disbursed more than $62,000 in federal COVID-19 emergency relief funds.
The counts of bank fraud and bank fraud conspiracy each carry a maximum penalty of 30 years in prison and a maximum fine of $1 million.