The owner of a Memphis, Tennessee, trucking firm and its outside financial adviser have been indicted on charges relating to allegations of fraud in receiving about $786,000 in Paycheck Protection Program funds.
Kevin Shaw is the owner and operator of Freight Masters Group, according to the indictment handed down Tuesday but announced Friday. Shaw was indicted along with Lisa Evans, who resides in Mississippi but operated a business called USA Taxes in Memphis.
The indictments were announced by the U.S. Attorney’s Office for the Western District of Tennessee. Celtic Bank is identified as the “victim bank.”
“Defendants Evans and Shaw participated in a scheme in May and June of 2020 to defraud Celtic Bank by obtaining a fraudulent PPP loan in the amount of approximately $786,212,” the indictment read. “The object of the scheme was for Evans and Shaw to obtain money from the PPP for their own personal benefit.”
Evans assisted Shaw in preparing the PPP loan application, according to the indictment.
“It was further part of the scheme that Evans provided Shaw with false Internal Revenue Service documents to submit in support of his PPP application to Celtic Bank,” per the indictment.
Evans then assisted Shaw in submitting the application for PPP funds through Celtic Bank. Among the data Evans and Shaw submitted, according to the indictment, were “false representations” regarding the number of employees at Freight Masters and the size of its payroll.
Shaw did receive $786,212 in loans from the program, the indictment said, and it was deposited in his Bank of America account. He then transferred approximately $220,800 to Evans as a “kickback fee,” according to the indictment. That transfer was followed up by a shift of a further $42,000 from Shaw to Evans.
“It was further part of the scheme that Evans and Shaw then spent this money for their own personal purposes rather than for payroll, mortgage interest, rent or utilities for Freight Masters Group Inc.,” the indictment said.
The loss attributable to the scheme was the entire amount of the PPP funds, $786,212.
The PPP was a program put together quickly by Congress when the COVID-19 pandemic first developed in spring 2020. It offered funds to companies to retain workers on their payrolls as long as a certain amount of the funds — it changed over time but originally was 75% — was spent for job retention. Other expenses were permitted as long as the minimum level of salary rescue was undertaken.
The specific charges in the indictment against both Evans and Shaw are conspiracy to commit bank fraud and making false statements to a federally insured bank. According to a prepared statement issued by the U.S. Attorney’s Office, the two charges each carry a maximum penalty of 30 years in prison and a maximum fund of $1 million.
On its website, Freight Masters describes itself as a “full-service solutions provider specializing in time-sensitive full or partial shipments.” The company lists its services as including an expedited division, which “handles any type of freight with a white glove touch”; a 65,000-foot warehouse; and a flatbed division. Other services listed are “full truckload, LTL, blanket-wrap, lift-gate, reefer, packaging services, one-off shipments, store openings [and] specialty install, tradeshow [and] exhibit asset management, furniture, fixture [and] facility moves.”
The money in the Shaw-Evans indictment isn’t close to being what is believed to be the biggest trucking-related amount at the center of a PPP-related indictment: the roughly $3.4 million scam that led trucking company owner Maurice Fayne to be sentenced to 17 years.
Oumar Sissoko recently was convicted of a PPP scam in California involving a fictitious pothole-repair company and received five years in prison for PPP fraud of $7.25 million.
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