Oakland man gets federal prison for COVID-19 PPP loan fraud conspiracy
An Oakland man and five others have been sentenced to federal prison for defrauding the COVID-19 Paycheck Protection Program out of millions, according to federal prosecutors.
Frank Mosley, 58, of Oakland, and his brother Reginald Mosley, 60, from Sacramento pleaded guilty to one count of conspiracy to commit bank fraud along with men from Elk Grove, Roseville and Rocklin.
Frank Mosley was a tax enforcement officer for the city of Oakland and a former IRS revenue officer who conspired to submit fraudulent PPP loan applications with his co-conspirators, all of whom raked in more than $3 million, the U.S. Attorney's Office said in a statement Friday.
Mosley and his codefendants stole the pandemic relief funds intended to help businesses distressed by the pandemic, "for their own personal gain," according to Special Agent Jon Ellwanger.
The Mosely brothers submitted fraudulent loan applications on behalf of Forward Thinking Inc. in August 2020, an entity they controlled in August 2020. They received over $1 million in relief funds, and after that, Reginald Mosley recruited the co-conspirators who owned companies to submit additional fraudulent loan applications, who then provided kickbacks to the Mosleys for their help to the tune of 15% of the cash.
All defendants falsely certified that they had dozens of employees and hundreds of thousands of dollars in monthly payroll expenses, but actually had shell companies with no legitimate staff and zero payroll expenses.
All of them also admitted to spending the money they received from the Paycheck Protection Program on personal expenses and investments, such as paying credit card bills or transferring the money to family members.
The Mosleys had to admit to filing false tax returns to cover up their scheme, as well. They were given 30 months in federal prison. Their coconspirators were given sentences ranging from 12 to 18 months.