Trucking Company Owner Charged With PPP Loan Fraud, Ponzi Scheme
Federal investigators have charged a reality TV star and owner of a trucking company with bank fraud and money laundering, alleging that he embezzled funds intended to help small businesses stay afloat during the COVID-19 pandemic.
Prosecutors allege that Maurice Fayne, aka “Arkansas Mo”, 37, of Dacula, Georgia, who appeared on the VH1 reality show “Love & Hip Hop: Atlanta”, applied for and received a loan from $ 3.7 million through the Paycheck Protection Program (PPP) in mid-April for his trucking company, Flame Trucking. Instead, federal investigators say, Fayne used the money to buy expensive jewelry, pay off child support, and rent a Rolls-Royce.
Fayne was also charged with wire fraud as part of a Ponzi scheme after 20 people invested more than $ 5 million in Flame Trucking, but investigators say he used investor money to pay his debts and personal expenses and transferred over $ 5 million to a casino to cover his gambling debt.
He was arrested in May on federal bank fraud charges stemming from the PPP loan. According to the initial complaint filed on May 12, Fayne submitted a PPP loan application to United Community Bank (UCB), headquartered in Blairsville, Georgia, which is a lender to the U.S. Small Business Administration (SBA) United.
The forgivable loans through PPP, administered by the US Small Business Administration, began with 350 billion dollars in the CARES law signed by President Donald Trump at the end of March and were renewed in April with an additional $ 320 billion.
In his request, Fayne said he has 107 employees and his average monthly payroll is almost $ 1.5 million. He also certified that the proceeds from the loan for Flame Trucking would be used to “retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments specified under the program rule. pay check protection ”.
According to the indictment, Fayne posed as the owner of a profitable trucking business from August 2014 to May 2020. However, prosecutors allege that his trucking business “never generated enough revenue. income to cover his expenses “.
Federal investigators say Fayne used P3 funds to pay $ 40,000 in delinquent child support, $ 50,000 in restitution owed in a previous fraud case and $ 65,000 in cash withdrawals.
Court records claim he also spent $ 85,000 on custom jewelry and $ 136,000 to lease a 2019 Rolls-Royce, and gave $ 230,000 to associates who helped him run a program. Ponzi. An additional $ 907,000 was spent to help an associate start a new business, according to court documents.
In late April, UCB discovered that the PPP loan to Fayne and Flame Trucking exceeded the maximum amount allowed by SBA guidelines and “took back part of the loan proceeds”, reducing the amount to around $ 2 million.
When UCB asked Fayne to provide additional information about Flame Trucking’s finances, court documents claim he sent statements from Arvest Bank, which investigators claim to be fraudulent because the bank closed the company’s account. trucking company in September 2019.
During the investigation, federal agents seized $ 617,000 from Fayne’s bank accounts, $ 136,000 used as a down payment on the Rolls-Royce and nearly $ 80,000 in cash at his residence.
They also seized eight Kenworth T-680 tractors, six Great Dane refrigerated trailers and more than $ 80,000 in custom jewelry, including a diamond ring, diamond bracelet and Rolex watch.
“The Repayment Protection Program’s emergency loan provisions were aimed at helping small businesses survive the COVID-19 pandemic,” US Attorney Byung J. “BJay” Pak said. said in a press release. “Fayne reportedly used the proceeds from the PPP loan to live a luxurious lifestyle that included renting a Rolls Royce and buying expensive jewelry, as well as payments to people involved in a Ponzi scheme. We intend to investigate and indict anyone who inappropriately misappropriates these essential funds for personal gain. “
Fayne’s attorney, Tanya F. Miller, of DuBose Miller LLC in Atlanta, filed a motion on June 16 to withdraw from the Fayne case.
In her motion, Miller, who was hired by Fayne before her arrest and negotiated her surrender, said the reality TV star “is currently without capacity for work, has no financial resources” and does not is not in a position to pay to be represented in this matter. .
A legal appointment hearing in the Fayne case was scheduled for Thursday in U.S. District Court in Atlanta.
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