In a recent case of CARES Act fraud, a Denver woman has been sentenced to four years in federal prison for her involvement in a scheme that resulted in the receipt of over $3.3 million in fraudulent COVID-19 loans. The woman, DeJane Reaniece Lattany, prepared and submitted fake applications for Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans, using false statements and documentation to obtain funds that were intended to support struggling businesses. She used the majority of the proceeds for her personal benefit, defrauding taxpayers out of millions. Lattany has been ordered to repay the stolen funds, along with interest. The case was investigated by the FBI Denver Division and prosecuted by Assistant United States Attorneys.
The United States Attorney’s Office for the District of Colorado recently announced the sentencing of DeJane Reaniece Lattany to four years in federal prison for her involvement in fraudulent activity related to the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act, signed into law on March 27, 2020, aimed to provide emergency assistance to small business owners impacted by the COVID-19 pandemic.
Two programs established under the CARES Act were the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL) program. These programs offered funding to small businesses, with the PPP providing loans to cover employee payroll costs and certain other expenses, and the EIDL program offering economic injury loans to help businesses meet financial obligations.
The CARES Act and Fraudulent Activity
PPP and EIDL Programs
Under the CARES Act, businesses that were in operation on February 15, 2020, were eligible for PPP loans, while eligibility for EIDLs required businesses to be in operation before February 1, 2020. The Small Business Administration (SBA) was authorized to issue advances known as Economic Injury Disaster Grants (EIDG) of up to $10,000 to eligible businesses. These grants did not need to be repaid.
False Statements and Certifications
DeJane Reaniece Lattany was found guilty of preparing and submitting fraudulent EIDL and PPP applications to the SBA. In her applications, Lattany made false statements regarding the number of employees, gross revenues, and cost of goods sold for the business entities she purportedly owned. She also falsely certified that the information provided in the applications was true and accurate. Lattany used the approved funds for personal benefit rather than for the intended purposes of paying payroll and eligible expenses.
Loan Forgiveness Applications
Lattany also sought loan forgiveness for the PPP loans she obtained by submitting fraudulent loan forgiveness applications. These applications contained false and fraudulent certifications and representations about her ownership of other businesses, as well as the average monthly payroll and number of employees for those businesses. The majority of the proceeds received through these loans were used for Lattany’s personal benefit.
The Case of DeJane Reaniece Lattany
Overview of the Case
Between June 2020 and January 2022, DeJane Reaniece Lattany submitted fraudulent EIDL and PPP applications to the SBA on behalf of business entities she claimed to own. The SBA approved and funded five EIDL applications and three EIDGs, totaling $430,000 in EIDLs and $20,000 in EIDGs. Additionally, Lattany obtained $2,887,976.94 in PPP loans through her fraudulent scheme.
Fraudulent EIDL Applications
In the fraudulent EIDL applications, Lattany provided false information about the entities’ number of employees, gross revenues, and cost of goods sold. By misrepresenting these details, she obtained EIDL funding that was intended to help struggling businesses impacted by the COVID-19 pandemic. Instead, Lattany directed the funds towards personal expenses.
Fraudulent PPP Applications
Lattany used similar tactics when applying for PPP loans. She submitted false certifications and representations about her ownership of other businesses, as well as the average monthly payroll and number of employees for those businesses. The funds secured through the fraudulent PPP applications were also misused for personal benefit.
Loan Forgiveness and Total Amount Paid Out
As part of her scheme, Lattany sought loan forgiveness for the PPP loans she obtained. By submitting fraudulent loan forgiveness applications, she aimed to have the loans forgiven entirely. The total amount paid out through Lattany’s fraudulent activities, including the EIDLs, EIDGs, and PPP loans, amounted to $3,337,976.94.
Sentencing and Restitution
United States District Court Judge Nina Y. Wang
DeJane Reaniece Lattany appeared before United States District Court Judge Nina Y. Wang for sentencing. On August 15, 2023, Judge Wang sentenced Lattany to four years in federal prison for her involvement in the CARES Act fraud. This sentence serves as a consequence for defrauding taxpayers and misusing funds intended to aid struggling businesses during the pandemic.
Period of Incarceration
In addition to the four-year prison sentence, Lattany was ordered to serve a period of incarceration as further accountability for her fraudulent activities. This period of incarceration reflects the seriousness of the crimes committed and sends a message about the consequences of engaging in fraudulent activity.
Alongside the prison sentence and period of incarceration, Lattany was also ordered to pay restitution. The court ordered her to pay $3,437,072.81, plus interest, as restitution for the funds she fraudulently obtained. This restitution amount reflects the total funds paid out as a result of Lattany’s scheme and aims to compensate for the financial losses incurred by the government and taxpayers.
Law Enforcement and Accountability
To ensure accountability and address fraudulent activity related to the CARES Act, various law enforcement agencies have been involved in investigating and prosecuting cases similar to that of DeJane Reaniece Lattany.
Federal Bureau of Investigation (FBI)
The Federal Bureau of Investigation (FBI) played a pivotal role in investigating Lattany’s fraudulent activities. They worked diligently to uncover the extent of her scheme and gather evidence to support her prosecution. The FBI continues to investigate cases of fraud related to the CARES Act, with the goal of holding individuals accountable for their actions.
U.S. Attorney’s Office for the District of Colorado
The U.S. Attorney’s Office for the District of Colorado, responsible for prosecuting federal cases within the district, led the prosecution of DeJane Reaniece Lattany. Assistant United States Attorneys Nicole C. Cassidy and Rebecca S. Weber handled the prosecution, working to present the evidence against Lattany and seek appropriate penalties for her crimes.
The COVID-19 Fraud Enforcement Task Force
In response to the increased prevalence of fraud related to the COVID-19 pandemic, the Attorney General established the COVID-19 Fraud Enforcement Task Force. This task force aims to coordinate efforts across government agencies to combat and prevent pandemic-related fraud. By collaborating with various agencies, the task force can pool resources and expertise to identify and prosecute individuals involved in fraudulent schemes.
Reporting Fraudulent Activity
To combat and prevent fraudulent activity related to COVID-19 relief programs, it is essential to report any suspected cases of fraud promptly. By reporting fraud, individuals can play an active role in holding fraudsters accountable and protecting the integrity of relief funds.
Contacting the National Center for Disaster Fraud (NCDF)
To report allegations of attempted fraud involving COVID-19, individuals can contact the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721. The hotline provides a dedicated channel for reporting and investigating fraudulent activities related to disasters and emergencies.
Providing Information and Reporting Fraud
Individuals who wish to provide information or report fraudulent activity can do so via the NCDF Web Complaint Form. This online form allows individuals to submit detailed information about suspected fraud, aiding law enforcement agencies in their investigations. By reporting fraud, individuals actively contribute to the efforts to combat and prevent fraudulent activity in relation to the CARES Act and other relief programs.
In conclusion, the case of DeJane Reaniece Lattany serves as a reminder of the importance of accountability and integrity in accessing and utilizing government relief funds. The sentencing and restitution ordered by United States District Court Judge Nina Y. Wang demonstrate the serious consequences individuals face when engaging in fraudulent activities. Law enforcement agencies such as the FBI and the U.S. Attorney’s Office for the District of Colorado play essential roles in investigating and prosecuting cases of fraud, ensuring the preservation of taxpayer funds and the integrity of relief programs. By reporting fraudulent activity to the National Center for Disaster Fraud, individuals can actively contribute to the efforts to combat and prevent fraud related to the CARES Act and other relief programs.