2 Louisville residents indicted for CARES Act fraud
Published 10:33 am Wednesday, August 2, 2023
A federal grand jury has indicted two Louisville residents on fraud and money laundering charges, involving the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) financial assistance program.
According to the indictment, between March 2020, and August 2022 Andrew Prell, 56, filed one fraudulent Economic Injury Disaster Loan (EIDL) application and two fraudulent applications for Paycheck Protection Program (PPP) loans, resulting in the theft of $1,687,033.
The U.S. Attorney’s office for the Western District of Kentucky alleges Prell utilized the entity Convergence of 4 Dimensions, a Kentucky, and Florida Limited Liability Company, to file the applications, in which he falsely exaggerated the number of employees, payroll expenses, and gross revenues of Convergence of 4 Dimensions in the applications. In addition, Prell is accused of using the money he received on unauthorized expenses under the CARES Act, including gambling and other personal expenses.
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In a separate case, between June 18, 2020, and September 22, 2021, Darlene McCoy, 66, was indicted for allegedly filing an EIDL application and three fraudulent applications for PPP loans, resulting in the theft of $165,416. She is accused of using the entities Letz Get It Crackin’, a Kentucky Limited Liability Company, and Darlene McCoy d/b/a Reds Creative Events, an unregistered entity, to file the applications, in which she falsely exaggerated the number of employees and payroll expenses of Letz Get It Crackin’ and the gross receipts of Reds Creative Events. The U.S. Attorney’s office says she also applied for forgiveness for all three of the PPP loans, falsely stating the amount that had been spent on payroll.
Under federal law, PPP loans were designed to provide a direct incentive for small businesses who were in operation When the COVID-19 pandemic started in February 2020, to keep their workers on the payroll. PPP loan proceeds were required to be used by the business on certain permissible expenses. Interest and principal on PPP loans could be entirely forgiven if the business spent the loan proceeds on the allowable expenses within a designated period, and used a certain percentage of the PPP loan proceeds on payroll expenses.
If convicted, McCoy faces up to 130 years in prison, while Prell could receive a maximum of 120 years.
The Treasury Inspector General for Tax Administration (TIGTA) Great Lakes Field Division conducted the investigation.