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Milwaukee men charged in COVID-19 relief fraud scheme

Posted at 5:13 PM, Oct 22, 2020
and last updated 2020-10-22 18:13:50-04

MILWAUKEE — Three Milwaukee men were charged in federal court Thursday for fraudulently seeking over $1.1 million in CARES Act loans.

Thomas Smith, Stephen Smith and Robert Hamilton, of Milwaukee, as well as and Samuel Davis, Jr. and Jonathan Henley, of Chicago, were charged with bank fraud and money laundering in a federal indictment filed in the Eastern District of Wisconsin Thursday.

Federal prosecutors allege that the five men submitted several fraudulent Paycheck Protection Program (PPP) loans to a financial institution and the Small Business Administration. But the suspects in fact had no actual businesses or employees, according to prosecutors.

In their filings, the suspects allegedly misrepresented the number of employees as well as payroll expenses in fake businesses, prosecutors say.

The indictment states further that the suspects submitted fake tax documents to support their fraudulent applications. The suspects sought to get over $1.1 million in PPP loan funds, according to prosecutors.

The CARES Act includes almost $700 billion in forgivable loans to small businesses, to be used to keep employees and pay other expenses.

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