ALBANY, GA. — This is an official press release from the U.S. Department of Justice (Department of Justice), published as received.
ALBANY, Ga. – The final codefendant convicted of a fraud scheme that illegally sought more than $1 million from pandemic relief funds was sentenced to federal prison.
Sharmaine Simpson, 37, of Pelham, Georgia, was sentenced to serve 30 months in prison to be followed by three years of supervised release on Aug. 15, after he previously pleaded guilty to one count of wire fraud. On March 13, co-defendants Jeremy Russell, 38, of Pelham, was sentenced to serve 30 months in prison to be followed by three years of supervised release after he previously pleaded guilty to one count of wire fraud; Travon Duhart, 40, of Montgomery, Alabama, was sentenced to serve 24 months in prison to be followed by three years of supervised release after he previously pleaded guilty to two counts of wire fraud; Mario Meadows, 46, of Albany, was sentenced to serve 24 months in prison to be followed by three years of supervised release after he previously pleaded guilty to one count of wire fraud; and Johnderrious Lovett, 31, of Dacula, Georgia, was sentenced to serve 12 months and one day in prison to be followed by three years of supervised release after he previously pleaded guilty to one count of conspiracy to commit wire fraud. Chief U.S. District Judge Leslie Gardner presided over the case. There is no parole in the federal system.
“Pandemic relief funds were intended to provide critical help to small businesses, not enrich fraudsters,” said U.S. Attorney Peter D. Leary. “We will pursue justice against those who criminally abused this taxpayer funded program.”
“So many businesses needed federal emergency assistance to stay afloat during the pandemic, and Simpson and his co-defendants misdirected that assistance money to line their own pockets,” said Rich Bilson, Supervisory Senior Resident Agent of FBI Atlanta’s Albany office. “Their greed affects every American taxpayer, and the FBI will continue to hold accountable those who abused taxpayer dollars and diverted them from citizens who desperately needed them.”
According to court documents and statements referenced in court, from March 2020 to at least April 2021, the defendants joined a conspiracy to collectively submit at least 25 different fraudulent Economic Injury Disaster Loans (EIDLs) and Paycheck Protection Program (PPP) loans on behalf of companies they controlled individually or together, seeking a total of $1,079,233.02 plus unemployment benefits. In all, the defendants received and deposited $411,657.02 from the Small Business Administration (SBA) as a result of these falsified claims. The various loan applications were for corporations the defendants established, and included all manner of concocted information, including fabricated revenues, employees, payroll costs, rent, operational expenditures and fraudulent tax returns. The defendants continued to make false statements after several loans were denied due to fraud alerts and continued their attempts to gain funds through the SBA and other government entities.
One example of the pandemic fraud scheme was a $100,000 loan received for J.T.L.S. Music Group. Russell, Duhart, Lovett and Simpson were listed as 25% owners of the business on their EIDL application and claimed to have ten employees. However, the Georgia Department of Labor reported that J.T.L.S. Music Group did not pay any wages or unemployment insurance to any employees from 2017 to 2022. J.T.L.S. Music Group also reported gross revenues of $250,000 for the 12-months prior to the “date of disaster” on its EIDL application but did not report any income or paid taxes to the State of Georgia from 2017 to 2022, nor did they file taxes with the IRS. After the $100,000 loan was deposited, Russell recalled someone texting “y’all betta get y’all money out because I got mine,” in a group text with him, Duhart, Lovett and Simpson.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted by Congress in March 2020, to provide emergency financial support to the millions of Americans suffering economic hardship due to the COVID-19 pandemic. As part of this effort, the SBA was able to provide EIDLs to individuals, households and businesses in federally declared disaster areas. The PPP was established as a forgivable loan to small businesses for eligible expenses, like payroll.
The case was investigated by FBI and the Department of Justice, Office of Inspector General (DOJ-OIG).
Criminal Chief Leah McEwen prosecuted the case for the Government.
