3 Chicago-area residents charged with COVID-19-relief fraud
CHICAGO (CBS) – Three Chicago-area residents are facing federal charges for allegedly fraudulently obtaining more than $2.75 million in small business loans under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
Samuel W. Jackson, 42 of Chicago, was charged with five counts of wire fraud and three counts of money laundering. David L. Sullivan II, 49, of Naperville and Elizabeth A. Chervinko, 41 of Chicago, were each charged with one count of wire fraud, according to a news release from the U.S. Attorney's Office of the Northern District of Illinois.
Prosecutors accused the three of engaging in fraud related to the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL), two sources of government relief funds under the CARE Act meant to help businesses impacted by the COVID-19 pandemic.
Jackson pleaded not guilty on Tuesday during an arraignment. Sullivan and Chervinko have arraignments scheduled for Aug. 17.
The defendants submitted fraudulent applications and supporting documents to lenders, loan service providers and the Small Business Association that contained false representations about their companies, including the number of employees, revenue and payroll amounts and other expenses, according to prosecutors.
The indictment alleges the defendants defrauded lenders of about $2.5 million in PPP loans and the SBA of about $256,000 in EIDL funds.
They allegedly used much of the money for their personal benefit, including the purchase of real estate and the lease and purchase of luxury vehicles.
Each wire fraud charge if punishable by up to 20 years in federal prison, while the maximum penalty of each count of money laundering is ten years.