Atlanta man arrested for $3M pandemic relief fraud scheme

ATLANTA - A 37-year-old Atlanta man was arrested and appeared in federal court on Monday on charges that he orchestrated a series of schemes to fraudulently obtain more than $3 million in pandemic relief funds intended to support struggling businesses during the COVID-19 crisis.

The backstory:

Ian Patrick Jackson was indicted by a federal grand jury on May 6 and now faces seven felony counts, including conspiracy to commit bank fraud, bank fraud, wire fraud, and money laundering. He made his initial appearance before U.S. Magistrate Judge Regina D. Cannon.

Federal prosecutors allege Jackson conspired with another Atlanta man to recruit at least nine business owners to submit fraudulent Paycheck Protection Program (PPP) loan applications. The applications allegedly included fake tax documents and falsely claimed each business had 16 employees with monthly payrolls of $120,000. Each business received $300,000 in PPP funds.

After receiving the funds, the business owners reportedly wrote "payroll" checks to individuals who did not work for them. The money was then allegedly diverted, with some of it passed to a co-conspirator and ultimately to Jackson.

In addition to the conspiracy, Jackson is accused of masterminding three other schemes, including:

• Using fake tax forms and doctored bank statements to apply for a $237,500 PPP loan;
• Submitting forged identification and false revenue statements to fraudulently apply for about $100,000 in Economic Injury Disaster Loans (EIDL) and PPP loans;
• Fraudulently securing $240,035 in PPP funds and $125,000 in EIDL loans and grants.

What they're saying:

Prosecutors say Jackson spent the funds on personal expenses including restaurant meals, spa services, phone and credit card bills, an Aruba vacation, and cash withdrawals.

"Ian Jackson took advantage of government programs meant to support American businesses struggling during a national emergency and world-wide pandemic," said Matthew R. Galeotti, head of the Justice Department’s Criminal Division. "Today’s charges reveal that Jackson was the mastermind behind numerous schemes, utilizing a variety of fraudulent tools and techniques, to lie to the SBA."

"Jackson’s arrest caps a lengthy investigation that involved multiple defendants and more than $3 million in stolen funds intended to help struggling Americans during a national health crisis," said U.S. Attorney Theodore S. Hertzberg. "These charges demonstrate our office’s commitment to collaborate closely with our law enforcement partners to prosecute fraudsters who pilfered CARES Act funds."

FBI Atlanta Special Agent in Charge Paul Brown said the agency will continue pursuing individuals who abused pandemic relief programs. "Lying to gain access to economic stimulus funds for personal gain will be met with justice," Brown said.

SBA Office of Inspector General Deputy IG Sheldon Shoemaker added, "While hard-working small business owners were looking for lifelines... the defendant and his conspirators were scheming to steal the very funds made available to them through SBA’s pandemic response programs."

What's next:

If convicted, Jackson faces a maximum of 30 years in prison for each of the bank fraud and conspiracy charges, and up to 20 years for each of the wire fraud and money laundering counts. Sentencing would follow federal guidelines but is ultimately at the discretion of the court.