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Case Number: 1:20-mj-00370-JSA
Judge: Justin S. Anand
Court: United States District Court for the Northern District of Georgia (Fulton County)
Plaintiff's Attorney: United States District Attorney’s Office
Description: Atlanta, GA - The United States of America charged Maurice Fayne with fraud.
Maurice Fayne, who stars in Love & Hip Hop: Atlanta, has been arrested on federal bank fraud charges arising from a Paycheck Protection Program (“PPP”) loan that he obtained in the name of Flame Trucking.
“The defendant allegedly took advantage of the emergency lending provisions of the Paycheck Protection Program that were intended to assist employees and small businesses battered by the Coronavirus,” said U.S. Attorney Byung J. “BJay” Pak. “We will investigate and charge anyone who inappropriately diverts these critical funds for their own personal gain.”
“The defendant allegedly stole money meant to assist hard-hit employees and businesses during these difficult times, and instead greedily used the money to bankroll his lavish purchases of jewelry and other personal items,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The department will remain steadfast in our efforts to root out and prosecute frauds against the Paycheck Protection Program.”
“At a time when small businesses are struggling for survival, we cannot tolerate anyone driven by personal greed, who misdirects federal emergency assistance earmarked for keeping businesses afloat,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI and our federal partners remain vigilant during this Coronavirus pandemic to make sure funds provided by programs like PPP are used as intended.”
“The defendant allegedly egregiously sought personal gain from a program intended to assist hardworking Americans in this challenging time,” said Special Agent-in-Charge Kevin Kupperbusch of the Small Business Association Office of Inspector General (SBA OIG) Eastern Region. “SBA OIG and its law enforcement partners will aggressively pursue allegations of wrongdoing to maintain the integrity of SBA’s programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Maurice Fayne is the sole owner of a Georgia corporation called Flame Trucking. On April 15, 2020, Fayne signed and submitted to United Community Bank (“UCB”) a PPP loan application in the name of Flame Trucking stating that the business had 107 employees and an average monthly payroll of $1,490,200. In seeking a loan in the amount of $3,725,500, Fayne certified that the loan proceeds would be used to “retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule.”
UCB ultimately funded the loan for $2,045,800. Within days, Fayne allegedly used more than $1.5 million of the PPP loan proceeds to purchase $85,000 in jewelry, including a Rolex Presidential watch, a diamond bracelet, and a 5.73 carat diamond ring for himself, to lease a 2019 Rolls Royce Wraith, to make loan payments, and to pay $40,000 for child support. Such payments are not an authorized use of PPP funds under the CARES Act.
On May 6, 2020, Fayne was interviewed by federal agents and admitted that he submitted a PPP loan application on behalf of Flame Trucking. Fayne claimed that he used all of the PPP loan proceeds to pay payroll and other business expenses incurred by Flame Trucking and denied using any of the PPP loan proceeds to pay his personal debts and expenses.
On May 11, 2020, agents executed a search at Fayne’s residence in Dacula and seized approximately $80,000 in cash, including $9,400 that Fayne had in his pockets, and the jewelry he purchased with the PPP funds. Agents also executed seizure warrants for three bank accounts that Fayne owned or controlled and seized approximately $503,000 in PPP funds.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within eight weeks of receipt and use at least 75 percent of the forgiven amount for payroll.
Maurice Fayne, a/k/a Arkansas Mo, 37, of Dacula, Georgia, was charged with bank fraud. Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation in conjunction with the Atlanta Complex Financial Crimes Task Force supported by the Gwinnett County Sheriff's Office, and the Small Business Administration-Office of the Inspector General.
Assistant U.S. Attorneys Russell Phillips, Bernita Malloy, and Michael J. Brown are prosecuting the case.
Georgia’s COVID-19 Task Force warns the public to be on the lookout for potential increased criminal activity related to federal stimulus checks, fake COVID-19 cures, personal protective equipment (PPE) price gouging and fair housing violations. The public can report potential scams to the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or to the NCDF e-mail address email@example.com. The public can also file complaints with the Attorney General’s Office by calling 800-869-1123 (toll-free) or at www.consumer.ga.gov.
Outcome: The charges set forth in the Indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.