SPRINGFIELD, Ill. – Two Central Illinois men are facing federal charges after allegedly exploiting the Small Business Administration’s COVID-19 disaster loan program, pilfering funds meant to keep legitimate businesses afloat during the pandemic. The indictments, handed down by a grand jury, reveal a brazen pattern of fabricated applications and diverted funds.
Charles J. Jones, 25, of Springfield, stands accused of applying for an Economic Injury Disaster Loan for a phantom business called “Just Like Jilla.” According to the indictment, Jones claimed the non-existent company had been operating for over a year, employed 11 people, and generated $1.2 million in revenue. He also allegedly lied about a prior felony conviction. The SBA fell for the scheme, wiring approximately $160,000 into Jones’ bank account. He is now facing four counts of wire fraud, in addition to the charge of fraud in connection with major disaster or emergency benefits.
Meanwhile, in Beardstown, Peter Garrido-Baez, 44, allegedly secured two SBA loans, totaling approximately $98,500, for “Garrido Apartments.” But the money wasn’t used for its intended purpose – alleviating economic injury. Instead, Garrido-Baez allegedly transferred $72,500 into a separate account and then wired $79,800 to a bank account in the Dominican Republic. The indictment alleges he intended to use the funds for construction of apartment buildings *in the Dominican Republic*, a clear violation of the loan agreement which stipulates funds must be used as working capital within the disaster area.
Garrido-Baez is facing a heavier rap, with seven counts of wire fraud and a single count of money laundering. The scale of the alleged scheme – diverting tens of thousands of dollars overseas – suggests a deliberate and calculated effort to profit from the pandemic’s economic fallout. Investigators say the funds were explicitly prohibited from being used for relocation outside of the disaster area.
Both Jones and Garrido-Baez have been issued summonses to appear in federal court in Springfield on January 5, 2021. If convicted, each man could face up to 30 years in prison for fraud related to disaster benefits. Wire fraud carries a maximum penalty of 20 years, and money laundering also carries a potential 20-year sentence. The investigation was a collaborative effort, spearheaded by the Internal Revenue Service, Criminal Investigation Division, and involving the U.S. Secret Service, Small Business Administration, and multiple other federal agencies.
Federal authorities are urging anyone with information about COVID-19 related fraud to come forward. The National Center for Disaster Fraud (NCDF) hotline is available at 1-866-720-5721, and complaints can also be submitted online. This case underscores the ongoing threat of fraud surrounding pandemic relief efforts and the commitment of federal agencies to hold perpetrators accountable. First Assistant U.S. Attorney Doug Quivey is prosecuting the cases.
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Key Facts
- Agency: U.S. Secret Service
- Category: Fraud & Financial Crimes
- Source: Official Press Release
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