But in a state facing a 6.5% unemployment rate Last August, a North Carolina woman reportedly used a $ 149,000 Covid-19 relief loan to purchase items from businesses including Louis Vuitton, Nordstrom, Neiman Marcus, IKEA and several diamond stores.
Jasmine Johnnae Clifton, a 24-year-old Charlotte resident, appeared in federal court this week after being charged with two counts of fraud for using a business that had been dissolved to obtain Covid-19 relief funds, according to a Release of the United States Attorney’s Office for the Western District of North Carolina.
The loan was part of the CARES Act Economic Disaster Lending Program. Funding has been provided by the US Small Business Administration (SBA) to small businesses in North Carolina “suffering substantial economic harm” as a result of the pandemic, according to a ASB press release.
Clifton did not respond to CNN’s requests for comment and his public defender declined to comment due to the pending status of the case.
Indictment: The loan was for a business that no longer existed
Clifton first applied to start an online clothing retail business Jazzy Jas LLC in February 2019 and applied for the SBA loan for the business on July 24, 2020, according to the deed of accusation obtained by CNN.
The problem? According to the indictment, the company no longer existed. He had been officially disbanded with the North Carolina Secretary of State a few months earlier in March 2020, but effectively disbanded in September 2019.
In order to secure funding, Clifton allegedly submitted a loan application on July 24, 2020, falsely stating that Jazzy Jas LLC generated $ 350,000 in income over a 12-month period prior to the pandemic, according to the indictment.
“CLIFTON has specifically agreed to use the proceeds of the loan for Jazzy Jas LLC” only as working capital to mitigate the economic damage caused by the disaster on January 31, 2020, “” the indictment reads.
A $ 150,000 loan was approved on August 8, 2020, and the indictment says the funds, less a $ 100 fee, were deposited into the Clifton credit union account approximately three days longer. late.
The indictment indicates that Clifton used the previous existence of Jazzy Jas LLC to “operate a federal loan program and obtain a substantial sum of money.” The federal government seized approximately $ 50,000 in funds from the Clifton credit union account in November, according to the indictment.
A grand jury first indicted Clifton on February 17 with wire fraud in connection with a disaster benefit and fraud in connection with a major disaster or emergency benefits. If convicted, the press release said the charges could result in a maximum of 30 years in prison each and a total fine of $ 1,250,000.
Clifton was released on $ 25,000 bail after his court appearance on Monday, the court record noted.
US lawyer wants Covid-19 funds to help the right people
Small businesses have particularly struggled to keep operating during the pandemic. More than 74% of small businesses reported experiencing a moderate overall adverse effect or a significant adverse effect as a result of the Covid-19 pandemic, according to the most recent data available from the US Census Bureau. Small Business Pulse Survey, taken the week of January 4 to January 10, 2021.
“At a time when our nation is grappling with the effects of the coronavirus pandemic and businesses are struggling to cope with the impact of COVID, scammers are seizing the opportunity to steal federal economic aid programs for line their pockets, “wrote US Attorney Andrew Murray. in a statement sent to CNN.
“My office is working hard to find criminals trying to exploit the pandemic and steal money intended for the economic recovery of businesses and communities in the Western District of North Carolina. “
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