Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced last week the unsealing of a Complaint charging GLENROY WALKER, GARY WHEELER and four others with conspiring to commit wire fraud by submitting fraudulent applications for loans from the Paycheck Protection Program (“PPP”) administered by the U.S. Small Business Administration (“SBA”). WALKER and LEVY are also charged with aggravated identity theft. The defendants were arrested this morning and were presented this afternoon before U.S. Magistrate Judge Judith C. McCarthy in White Plains federal court.
U.S. Attorney Damian Williams said: “As alleged, the defendants schemed to steal millions of dollars from a program Congress created to help struggling small businesses weather the COVID-19 pandemic. As we continue to recover from the COVID-19 pandemic, this Office will pursue and prosecute the fraudsters that took advantage of a global emergency to greedily line their own pockets.”
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FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, the defendants conspired to fraudulently obtain more than $14 million from the Paycheck Protection Program through applications containing sham documents. This unfortunately is another example of individuals attempting to scam a program that was designed to help Americans during unprecedented upheaval. Ensuring that fraudsters who abused the Paycheck Protection Program are brought to justice remains a priority for the FBI.”
According to the Complaint unsealed today:
Between at least July 2020 and February 2022, GLENROY WALKER and HOWARD LEVY operated a scheme to submit fraudulent applications for loans from the SBA’s Paycheck Protection Program. The PPP was created by Congress to provide billions of dollars in forgivable loans to small businesses struggling to fund payroll and certain other qualifying business expenses because of the effects of the COVID-19 pandemic. The PPP was overseen by the SBA, which guaranteed loans issued, in the first instance, by commercial lenders. WALKER and LEVY submitted more than 100 fraudulent PPP loan applications to various financial institutions. Among other fraudulent misrepresentations, the PPP applications WALKER and LEVY submitted frequently contained phony bank statements and tax documents. SHERRIL BAEZ, NORMA GETTEN, DONNAT POWELL, and GARY WHEELER all participated in this scheme with WALKER and LEVY by, among other things, participating in the submission of fraudulent applications for their own purported businesses and recruiting other prospective fraudulent PPP applicants into the scheme. WALKER and LEVY received significant kickbacks from the applicants, including BAEZ, GETTEN, POWELL, and WHEELER, and shared portions of their kickbacks with recruiters, including some of the defendants.
The fraudulent applications submitted by the six defendants collectively sought more than $14.7 million in loans and resulted in the disbursement of more than $4.6 million from various financial institutions, all guaranteed by the SBA.
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WALKER, 65, of New Rochelle, New York, and WHEELER, 46, of Mount Vernon, New York, are each charged with conspiracy to commit wire fraud affecting a financial institution. That charge carries a maximum penalty of 30 years in prison. WALKER is also charged with a single count of aggravated identity theft, which carries a mandatory two-year consecutive sentence.
The minimum and 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 FBI.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Jared Hoffman and Derek Wikstrom are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
