Texas Duo Slammed for CARES Act Loan Scam

A pair of Texans is facing serious time behind bars for allegedly orchestrating a massive CARES Act loan scam, bilking millions from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) Program.

Shawn Nicholas Young, 41, of Missouri City, and Trenikia Lashae Banks, 40, of Houston, were arrested and are being held without bond pending their initial appearances before U.S. Magistrate Judge Richard Bennett at 2 p.m. today.

According to an 11-count indictment, Young and Banks concocted a scheme to submit fake loan applications to the Small Business Administration (SBA) and several banks authorized to approve and fund PPP loans. They allegedly submitted false tax documents, including phony personal and business tax returns, to support the loan applications.

The indictment alleges that the pair used the loan proceeds to make large cash withdrawals and to pay for unauthorized and non-business expenses, including residential mortgages, home improvement loans, and the purchase of vehicles. Some of the money also went to Young as kickback payments for submitting fraudulent applications for the businesses Banks and others owned, according to the allegations.

The CARES Act loan scam is a serious offense, carrying a maximum sentence of up to 20 years imprisonment for conspiracy and wire fraud, as well as a $250,000 maximum possible fine. The money laundering count carries a possible 10-year prison term and a fine of up to $250,000 or twice the value of the property involved in the transaction.

Homeland Security Investigations, the Federal Housing Finance Agency – Office of Inspector General (OIG), the Treasury Inspector General for Tax Administration, the Small Business Administration – OIG, and the Federal Deposit Insurance Corporation – OIG conducted the investigation with the assistance of the Fort Bend County Sheriff’s Office. Assistant U.S. Attorneys Stephanie Bauman and Shirin Hakimzadeh are prosecuting the case.