Two Florida Men Plead Guilty to $35 Million COVID-19 Relief Fraud Scheme
U.S. Department of Justice
Two Florida men pleaded guilty this week in the Northern District of Ohio for leading a nationwide scheme to fraudulently obtain over $35 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
According to court documents, James R. Stote, 55, of Hollywood, and Phillip J. Augustin, 52, of Coral Springs, conspired to obtain millions of dollars in fraudulent PPP loans. Augustin and Stote obtained a fraudulent PPP loan for Augustin’s company, Clear Vision Music Group LLC, using falsified documents. After submitting that application, Stote and Augustin immediately began working to obtain larger PPP loans for themselves and their associates. Stote and Augustin recruited additional PPP loan applicants and prepared and submitted fraudulent loan applications for them in exchange for a share of the loan proceeds. The applications they submitted for all of the loans in the scheme relied on fake payroll numbers, falsified IRS forms and phony bank statements. They submitted or facilitated at least 79 fraudulent loan applications worth at least $35 million and planned to submit more.