Two Maryland residents have been charged with conspiracy to commit wire fraud for their involvement in submitting fraudulent COVID-19 relief loan applications and receiving over $300,000 in illegally obtained funds.
The complaint was filed on December 16, 2022 and was unsealed following the arrests of Tomeka Glenn, age 46, and Kevin Davis, age 42.
The defendants are expected to have an initial appearance in U.S. District Court in Baltimore beginning at 2:00 p.m. this afternoon.
The charges were announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; and Interim Chief Dennis J. Delp of the Baltimore County Police Department.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal law enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic, including forgivable loans to small businesses for job retention and certain other expenses, through the Paycheck Protection Program, administered through the Small Business Administration (SBA). The SBA also offered an Economic Injury Disaster Loan (EIDL) and/or an EIDL advance to help businesses meet their financial obligations. An EIDL advance did not have to be repaid, and small businesses could receive an advance, even if they were not approved for an EIDL loan. The maximum advance amount was $10,000.
According to the affidavit filed in support of the criminal complaint, in September 2020, a Baltimore County Police Department detective investigating fraudulent PPP loans associated with targets of a criminal investigation identified several other individuals, including Glenn, who applied for and received PPP loans and EIDLs, using false and fraudulent information. As detailed in the affidavit, a review of the PPP and EIDL applications submitted by Glenn for businesses that she owns and/or controls were found to contain false statements and misrepresentations as to the legitimacy of the business; the number of employees; the financial earnings and payroll expenses of the businesses; and the income taxes withheld by the businesses. The affidavit alleges that how Glenn spent the loan proceeds was inconsistent with payroll and other business expenses allowable under the loan program.
For example, on June 19, 2020, Glenn allegedly filed an EIDL application for “Kdonsvanity décor.” An entity call K’Dons Vanity Décor was formed in Maryland on December 17, 2019. Glenn was listed as the registered agent for the entity with her home address as the address of the company. The application claimed that the business had gross revenues of $175,000 and had 10 employees. IRS records indicate that there were no business tax filings for K’Don’s Vanity Décor LLC for tax years 2019 or 2020. Glenn also responded “no’ to the question as to whether she had been convicted for any felony within the last five years. In fact, Glenn had been convicted of felonious credit card fraud in Fairfax County, Virginia in 2016 and of access device fraud in York County, Pennsylvania. Glenn received a $10,000 EIDL advance as a result of the application, but the larger EIDL loan sought in the application was ultimately declined by the SBA due to “unsatisfactory credit history.”
The affidavit alleges that Glenn submitted a similar fraudulent application for a PPP loan on behalf of K’Dons Vanity Décor and on August 8, 2020, received loan proceeds of $70,357.50. A review of Glenn’s bank accounts reveals that shortly after receiving the PPP loan funds, Glenn made purchases inconsistent with those allowable under the PPP loan program. For instance, Glenn purchased luxury goods, including multiple pairs of Christian Louboutin brand shoes, and resort travel with Davis. On July 19, 2021, Glenn submitted an application for loan forgiveness, claiming that $67,390 of the PPP loan had been spent on payroll costs, and the loan was forgiven.
During the course of the investigation, law enforcement discovered multiple other business entities (or purported business entities) associated with Glenn that applied for EIDL or PPP loans, including TD Innovative Consulting, referenced above, and Epoxy By S.H.E. LLC, in addition to “Kaydon Vanity Décor.” As detailed in the affidavit, the loan applications contained similar false statements as to the legitimacy of the businesses, number of employees, and financial condition of the entities and the loans were ultimately denied.
The affidavit further alleges that Glenn engaged in a scheme to assist Davis, with whom she is in a romantic relationship, to submit and receive fraudulent PPP and EIDL loans. Specifically, Davis allegedly submitted a fraudulent PPP loan application on behalf of For Keepsake Investment Realty, which included false statements as to the number of employees and amount of payroll, as well as including a fraudulent bank statement and IRS Form 940-Employer’s Annual Federal Unemployment Tax Return for 2019-in support of the application. Davis also responded “no’ to the question as to whether he had been placed on any form of parole or probation within the last five years, when in fact, on March 24, 2017, Davis began four years of supervised release for a 2013 federal conviction in Arizona for conspiracy to distribute marijuana. On March 18, 2021, Davis received PPP loan proceeds of $145,369 on behalf of For Keepsake Investment Realty.
Further, a fraudulent EIDL loan application on behalf of For Keepsake Investment Realty, listing Davis as the owner of the business, was submitted on June 30, 2020, which claimed, among other things, that the business had gross revenues of $250,000 and employed 10 employees. On July 2, 2020, and July 15, 2020, Davis received an EIDL advance of $10,000 and EIDL loan proceeds of $64,900, respectively, on behalf of For Keepsake Realty.
As detailed in the affidavit, in the months following the disbursement of the EIDL loans, Davis purchased multiple airline tickets, luxury goods, and paid for vacations. Moreover, on December 7, 2021, For Keepsake Realty sent $7,000 via a teller transfer to KDons Vanity Décor LLC’s bank account, which was controlled by Glenn.
In addition to the fraudulent PPP and EIDL loans obtained by Glenn and Davis, the affidavit alleges that Glenn received approximately $21,000 and Davis received approximately $13,000 in unemployment compensation based on fraudulent applications they submitted.
If convicted, Glenn and Davis each face a maximum sentence of 20 years in federal prison for the wire fraud conspiracy. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
The District of Maryland Strike Force is one of three strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.