“Indeed, two of the businesses did not open their bank accounts until after the time period reported on the fake bank statements,” he said.
When the loans were deposited into the businesses’ accounts, the men moved more than $2 million to accounts for companies owned by Thomas, who is from Duluth.
“These transfers were purportedly for payroll services and rental payments, but none of the four businesses that sent money to Thomas’ companies had any legitimate business transaction with either of those companies,” Pak said.
Gaines, of Dallas, transferred about $335,000 to Jackson’s company, Management Resource Services Inc., Pak said. They claimed the funds would pay for a project Jackson’s company would complete for Gaines, but investigators later discovered the project did not exist.
Federal prosecutors said none of the companies engaged in any business-related transactions. Instead, Thomas used some of the funds transferred to his businesses to buy a Mercedes Benz S Class and a Range Rover, Pak said.
Jackson used the money transferred to her to pay car loans, and the other business owners used the funds for “various personal expenses and withdrawals,” the U.S. Attorney said.
“During the investigation, federal agents seized nearly $3.1 million dollars in PPP proceeds from ten bank accounts before the defendants could further deplete these funds,” Pak said. They also seized Thomas’ Range Rover.
All five were indicted Tuesday, according to Pak. In addition to bank and wire fraud conspiracy, the men are charged with bank fraud, wire fraud, making false statements to a federally insured financial institution and money laundering.