KNOXVILLE, Tennessee – On January 13, 2022, James Waylon Howell, 39, of Knoxville was sentenced by the Honorable R. Leon Jordan to 18 months in prison in the US District Court for the Eastern District of Tennessee in Knoxville.
Howell pleaded guilty to committing more than $150,000 in fraud related to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, and money laundering.
“This prosecution highlights the Justice Department’s commitment to aggressively prosecuting those who defrauded these important programs to provide economic aid to those who have suffered financially as a result of the COVID-19 pandemic,” said United States attorney , Francis M. Hamilton III. . “Fortunately, the prompt and skillful work of our federal partners has made it possible to recover a significant amount of stolen money.”
“Our office will continue to investigate those who are fraudulently taking advantage of the funding of Coronavirus aid available to help others during the pandemic and bring them to justice,” said FBI special agent Joe Carrico.
“As companies suffered and struggled to weather the pandemic, others chose greed,” said assistant special agent in charge of IRS criminal investigation Brian Thomas. “IRS-CI will continue to use its financial expertise to identify and recommend criminals abusing a crisis.”
The CARES Act is a federal law enacted in March 2020 to provide emergency financial assistance to the millions of Americans suffering the economic impact of the COVID-19 pandemic. Two primary sources of relief through the CARES Act were the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”) program. PPP loans consisted of more than $640 billion in forgivable small business loans for payroll, mortgage interest, rent and utilities. The EIDL program provided low-interest loans to business owners to pay for items such as bills payable and other bills that could not be paid due to COVID-19.
As stated in Defendant’s filed plea deal, from April 2020 to June 2020, Howell fraudulently applied for four loans totaling $154,700 through the PPP and EDIL programs. Howell filed fraudulent applications under the names of two companies that did not qualify for the COVID-19 relief funds Howell was seeking. Howell filed two fraudulent applications with financial institutions seeking PPP funds and two fraudulent applications with the Small Business Administration seeking EIDL funds. As part of his fraud scheme, Howell has submitted false evidence, including documents from the IRS, and made false statements about the number of people the companies employed, the income generated and the wages paid. Howell has also made false statements about the business entities and the intended use of the loan proceeds.
For example, under the advocacy agreement, Howell filed an online filing with the Small Business Administration on April 1, 2020 on behalf of Advanced Strategy Holdings, LLC, requesting $83,800 in EIDL funds. In the filing and in the supporting documents that Howell filed with the SBA in support of the loan, Howell claimed that Advanced Strategy Holdings employed four people, generated $700,000 in gross revenue, earned $0 in cost of goods sold and paid a wage of $440,000 in the twelve months leading up to the COVID-19 pandemic. These claims were all false.
This case is the result of an investigation conducted by the FBI and the Internal Revenue Service – Criminal Investigation.
United States Assistant Attorney William A. Roach, Jr., who also serves as the Bureau’s coronavirus fraud coordinator, has pursued the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to pool the resources of the Department of Justice in partnership with government agencies to strengthen efforts to fight and prevent pandemic fraud. The Task Force is strengthening efforts to investigate and prosecute the most culpable domestic and international criminal actors and assist agencies charged with managing emergency programs to prevent fraud, including by expanding and incorporating existing coordination mechanisms, resources and identifying techniques to detect fraudulent actors and their schemes, and sharing and leveraging information and insights gained from past enforcement efforts. For more information on the ministry’s response to the pandemic, please visit: https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud with COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or using the NCDF web complaint form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.