Chad B. Thomas, Wire Fraud, Tennessee 2023

GREENEVILLE, TN – Chad B. Thomas, 41, of Blountville, Tennessee, is headed to federal prison after being sentenced to 40 months imprisonment for a brazen scheme to defraud the Paycheck Protection Program (PPP). U.S. District Judge J. Ronnie Greer handed down the sentence on August 21, 2023, in Greeneville, bringing a measure of justice to a scheme that siphoned vital pandemic relief funds.

Thomas pleaded guilty to one count of wire fraud (18 U.S.C. § 1343) as part of a plea agreement. Beyond the 40-month sentence, the judge ordered three years of supervised release following incarceration and a hefty restitution order of $307,700. The scheme unfolded in May and July of 2020, a period when legitimate businesses were desperately seeking aid to stay afloat.

Court records reveal Thomas submitted three fraudulent loan applications, inflating payroll expenses and fabricating supporting documentation. He wasn’t just padding the numbers; he created entirely fictitious employees, including members of his own family, his minor children, and even listing several nationally known religious figures as if they were on the Kingdom of God, Inc. payroll. That last entity, incorporated as a religious organization with the Tennessee Secretary of State, existed solely on paper.

The largest fraudulent application, for $207,500, was submitted for Kingdom of God, Inc. to a lender in San Diego, California. Despite having no employees and no actual business operations—the Tennessee Secretary of State ultimately dissolved the company for failure to file reports—the lender approved the loan. The funds were deposited into a bank account controlled by Thomas, who promptly began diverting the money for personal use. Neither the state of Tennessee nor the IRS had any record of actual employee payments from the sham organization.

Federal investigators weren’t left empty-handed. The U.S. Secret Service, leading the investigation with Special Agents Kay Berry and Thomas Whitehead, seized and administratively forfeited $161,938.01 from bank accounts Thomas controlled. The investigation highlights the Secret Service’s expanding role beyond presidential protection to include complex financial crime investigations.

U.S. Attorney Francis M. Hamilton III of the Eastern District of Tennessee, along with Resident Agent in Charge Jason Brown of the United States Secret Service, announced the sentencing. Assistant U.S. Attorney Mac D. Heavener III prosecuted the case. This case is part of the broader COVID-19 Fraud Enforcement Task Force, established by the Attorney General to combat pandemic-related fraud and bring perpetrators to justice. The Task Force aims to coordinate resources and investigate the most egregious cases of abuse of relief programs.

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