Pennsylvania Man Admits $4.8 Million Cares Act Loan Fraud Scheme
Nov 16, 2023
From the U.S. Attorney’s Office, District of New Jersey
TRENTON, N.J. – A Pennsylvania man admitted to his role in a scheme to fraudulently obtain over $4.8 million in federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) for himself and others, U.S. Attorney Philip R. Sellinger announced today.
Darryl Duanne Young, aka “Darryl Duanne Isom Young,” 60, of Kingston, Pennsylvania, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court on Nov. 14, 2023, to an information charging him with one count of conspiracy to commit bank fraud and one count of money laundering.
“This defendant admitted taking advantage of government programs that were specifically designed to provide needed financial assistance to Americans during the COVID-19 pandemic. Combatting pandemic fraud in all of its forms is a top priority for this office and our law enforcement partners. Together, we will continue to root out those who have exploited the suffering of others to line their own pockets, and bring them to justice.”
U.S. Attorney Philip R. Sellinger
“IRS Criminal Investigation special agents are specially equipped to follow the complex financial trail left by criminals,” Tammy Tomlins, Special Agent in Charge of IRS – Criminal Investigation Newark Field Office. “Let today’s plea serve as a proof of the commitment of IRS-CI and our law enforcement partners dedication to vigorously pursue those who took advantage of government programs intended to provide financial assistance to Americans in need during the COVID-19 pandemic.”
“The CARES Act was created to assist to American citizens and businesses that were impacted financially by the COVID-19 Pandemic,” Christopher A. Nielsen, Inspector in Charge, Philadelphia Division, said. “However, as alleged, Darryl Young, and his co-conspirators, manipulated this critical lifeline through a sophisticated scheme that fraudulently obtained millions of dollars in Paycheck Protection Program (PPP) loans. Postal Inspectors will continue to work with the U.S. Attorney’s Office, and our law enforcement partners, to identify and hold accountable, those individuals who steal pandemic relief to fulfill their own greed.”
“Mr. Young admittedly obtained money from the Paycheck Protection Programs intended to assist those with critical needs during the pandemic,” Gail S. Ennis, Social Security Administration Inspector General, said. “His criminal actions allowed him and his fellow conspirators to selfishly profit. We will continue to collaborate with our law enforcement partners to hold those accountable who misuse Social Security numbers, falsify documents, and fraudulently obtain access to federal benefit programs. I appreciate the collective efforts of the investigating agencies and the U.S. Attorney’s Office for prosecuting this case.”
“Today’s guilty plea sends a clear message that those who fraudulently obtained funds from COVID-19 relief programs will be held accountable,” Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG) said. “The FDIC OIG remains committed to working with our law enforcement partners to investigate and bring to justice those who participate in fraudulent schemes and threaten to undermine the integrity of our Nation’s banking system.”
“Today, Darryl Duanne Young admitted his role in stealing nearly $5 million in relief funds intended to support small businesses impacted by the COVID-19 global pandemic,” Homeland Security Investigations (HSI) Newark acting Special Agent in Charge Michael Alfonso said. “This is an egregious case of an individual taking advantage of an unprecedented public health crisis for personal gain. HSI Newark and our law enforcement partners will aggressively pursue those who perpetrate these illicit schemes and see that they are brought to justice.”
According to documents filed in this case and statements made in court:
Young engaged in a scheme to illegally obtain for himself and his conspirators over $4.8 million in loans authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Young submitted and directed others to submit fraudulent PPP and EIDL loan applications, which fabricated numbers of employees and misrepresented company information, to induce lenders to approve the loan applications that they otherwise would not have approved. Among other things, Young submitted falsified tax documents and bank statements to a victim lender in support of PPP loan applications. Young personally received over $230,000 in PPP loans for businesses he controlled and received a percentage of loan proceeds for assisting in submitting fraudulent applications on behalf of others.
The applications Young submitted each allegedly contained fraudulent representations to the lender – including a victim lender that was a member bank of the Federal Home Loan Bank system – including bogus federal tax documents. According to IRS records, none of the purported tax documents that Young submitted in support of the loan applications were ever in fact filed with the IRS. Based on Young’s misrepresentations, loan applications for his purported businesses and the purported businesses of other applicants were approved for approximately $4.8 million in federal COVID-19 emergency relief funds meant for distressed small businesses.
The charge of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. The charge of money laundering carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. As part of his guilty plea, Young agreed to make restitution to the victim lenders for the full amount of the fraudulent PPP and EIDL loans. Sentencing is scheduled for March 18, 2024.
U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tomlins; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Nielsen Philadelphia Division; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Special Agent in Charge Brian Tucker; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Alfonso, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Katherine M. Romano and David E. Dauenheimer of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Read more from the SSA: Read More