Latoya Stanley, COVID-Relief Fraud, Florida 2020

A Miami couple has been charged with participating in a scheme to file four fraudulent loan applications seeking more than $1.1 million in forgivable Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

LAToya Stanley, 38, and Johnny Philus, 33, both of Miami, were originally charged via a complaint filed in the Southern District of Florida on August 26, 2020. The couple pleaded guilty for their participation in a scheme to file four fraudulent loan applications seeking more than $1.1 million in forgivable PPP and EIDL loans.

On her PPP application, Latoya Stanley claimed to employ 18 individuals from her company, Dream Gurl Beauty Supply LLC. Johnny Philus, meanwhile, stated that he employed 29 individuals at his company, Elegance Auto Boutique LLC. In actuality, Stanley and Philus did not employ anyone at their respective companies.

Stanley and Philus worked together to effectuate the fraud and ultimately received over $1 million in fraudulent funds from the fraudulent PPP and EIDL applications before their schemes were uncovered. The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on payroll expenses.

Sentencing has been scheduled for June 2. This case was investigated by the SBA-OIG, USPIS, and TITGA. Trial Attorney Louis Manzo of the Criminal Division’s Fraud Section is prosecuting the case. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the 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.

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