Pennsylvania tax preparer sentenced to prison in $400K PPP loan fraud scheme, U.S. officials say
By Rachael Lardani
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YORK, Pennsylvania (WGAL) — A York County tax preparer was sentenced to 18 months in federal prison for his role in a bank fraud scheme involving fraudulent Paycheck Protection Program (PPP) loan applications, according to the U.S. Attorney’s Office for the Middle District of Pennsylvania.
Dommonick Chatman, 50, of York, previously pleaded guilty to one count of bank fraud. He was also sentenced to three years of supervised release and ordered to pay $341,438.82 in restitution to the federal government.
U.S. Attorney Brian D. Miller said Chatman participated in preparing, or approved an employee’s preparation of, fraudulent PPP loan applications for nearly 20 people over several months in 2021.
The applications sought more than $400,000 in federal relief funds, approximately $341,438.82 of which was disbursed, according to prosecutors.
False business and income information The PPP was established to help qualifying small businesses maintain their operations during the COVID-19 pandemic, according to the U.S. Attorney’s Office. Applicants were required to provide information about their businesses, including employee numbers and expenses, along with supporting documentation.
According to prosecutors, numerous applications submitted through Chatman’s business, The Chatman Group LLC, contained fraudulent information. Officials said some applicants claimed businesses that did not exist by Feb. 15, 2020, as required under program rules, while others reported income that did not support the loan amounts they requested.
Chatman had prepared tax returns for several of the applicants and knew them personally as existing clients, according to prosecutors. Because of those relationships and his knowledge of their finances, investigators said Chatman knew their PPP applications contained false information.
Chatman received a portion of the loan proceeds Chatman received approximately 5% of each approved loan, or about $1,000 per application filed through his company, according to the U.S. Attorney’s Office. When an employee helped process an application, Chatman shared the proceeds with that employee.
Prosecutors also said Chatman obstructed the federal investigation by disposing of a handwritten list identifying clients who had obtained PPP loans through his business.
This case was investigated by the FBI’s Capital Area Resident Agency in Philadelphia and the U.S. Department of the Treasury’s Office of Inspector General.
According to the U.S. Attorney’s Office, the Justice Department’s Fraud Section has led federal efforts to prosecute fraud involving the PPP. Since the Coronavirus Aid, Relief, and Economic Security Act took effect, authorities said the section has prosecuted more than 150 defendants in over 95 criminal cases and seized more than $75 million in proceeds connected to fraudulently obtained PPP funds.
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