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Date: 03-12-2024
Case Style:
Case Number: 23-CR-9.
Judge: C.J. Williams
Court: The United States Court for the Northern District of Iowa (Linn County)
Plaintiff's Attorney: The United States Attorney’s Office for Cedar Rapids
Defendant's Attorney:
Description:
a COVID-19 Pandemic Loan Scheme.
Government Lost over $600,000
A former Cedar Rapids, Iowa, resident who helped other individuals procure more than 30 false and fraudulent COVID-19 pandemic loans, valued at more than $600,000, was sentenced on March 8, 2024, to six months in federal prison. Diamond Davies, age 24, from Maple Grove, Minnesota, received the prison term after a July 31, 2023 guilty plea to one count of wire fraud.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted in late March 2020 that provided emergency financial assistance, including Paycheck Protection Program (“PPP”) loan funds, to the millions of Americans who were suffering the economic effects of the COVID-19 pandemic. Evidence at Davies’s plea and sentencing hearings showed that, over a two-month period in 2021, Davies helped to facilitate approximately 50 fraudulent PPP loan applications with a total value of approximately $1 million. Of these fraudulent PPP applications, over 30 were successful, and the government and its participating lenders in the PPP lost over $600,000. To obtain the fraud proceeds, false, fraudulent, and fictitious documents and statements, including fake tax documents, were submitted to various lending institutions in support of the PPP loans for the PPP applicants. Davies helped collect a fee (a portion of the fraudulent loan proceeds) from some of the PPP applicants.
Davies was sentenced in Cedar Rapids by United States District Court Chief Judge C.J. Williams. Davies was sentenced to six months’ imprisonment. She was ordered to make $651,582 in restitution to the Small Business Administration and one of its participating lenders. She must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department's response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice's National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Davies is being held in United States Marshal’s custody until she can be transported to a federal prison. The case was prosecuted by Assistant United States Attorney Timothy L. Vavricek and investigated by the Small Business Administration, Office of the Inspector General and the Federal Bureau of Investigation.
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Plaintiff's Experts:
Defendant's Experts:
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