Melvin Thompson Jr., COVID-19 Relief Loan and Tax Fraud, Maryland 2024

Baltimore, Maryland – A Maryland man has pleaded guilty to fraudulently filing COVID-19 CARES Act loans and tax fraud, according to a guilty plea announced by U.S. Attorney Erek L. Barron, along with SAC Kareem A. Carter, Internal Revenue Service – Criminal Investigation (IRS-CI), Washington, D.C. Field Office.

Melvin Thompson Jr., 34, of Chestertown, Maryland, pleaded guilty to one count of wire fraud and one count of filing a false tax return in connection with submitting fraudulent loan applications.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act — a federal law enacted in March 2020 — provided emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. The CARES Act gives financial assistance including forgivable loans to small businesses for job retention and other expenses.

According to his plea agreement, beginning around March 2020, and continuing until approximately February 22, 2021, Thompson knowingly executed a scheme to defraud the U.S. Small Business Administration by obtaining fraudulent EIDLs and loans under the PPP. In addition, as part of his scheme, Thompson filed false corporate tax returns, under penalties of perjury, with the IRS on behalf of four businesses seeking EIDL money.

Thompson primarily used the small business relief loan proceeds to engage in high frequency trading of options contracts and other securities, mainly at TD Ameritrade, where during 2020 alone he purchased and sold more than $12 million in securities. Through this high frequency trading, Mr. Thompson lost the $791,004 that he gained through this scheme, with the exception of money he spent to purchase a 2020 Lincoln Navigator.

The District of Maryland Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the CARES Act.

Sentencing is scheduled for March 19, 2025, at 10 a.m.

For more information on the COVID-19 pandemic relief fraud, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the National Center for Disaster Fraud (NCDF) 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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