Baltimore, Maryland – Reginald Davis, 40, of Baltimore, is facing federal indictment for wire fraud and money laundering relating to the submission of fraudulent COVID-19 CARES Act loan applications.
The indictment was returned on August 3, 2023, and unsealed today upon the arrest of the defendant.
Davis is expected to have an initial appearance in U.S. District Court in Baltimore at 1:30 p.m. this afternoon.
The indictment was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; and Acting Special Agent in Charge Kareem A. Carter of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.
“Davis allegedly stole well over one million taxpayer dollars intended to assist those suffering from the effects of the pandemic,” said United States Attorney Erek L. Barron. “It remains a top priority of my office to hold accountable those who took unfair advantage of the COVID-19 pandemic relief.”
“Organizations seeking to better the city of Baltimore entrusted Strong City Baltimore and Reginald Davis to help manage their money,” said Special Agent in Charge Thomas J. Sobocinski of the FBI’s Baltimore field office. “Davis is accused of exploiting that trust by orchestrating this unscrupulous scheme and misusing federal CARES Act funds to cover up his criminal behavior. This indictment serves as a message that the FBI and our partners are working hard every day to protect taxpayers.”
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal law enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic. Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and certain other expenses, through the Paycheck Protection Program. PPP loan applications were processed and funded by participating lenders with a 100% guarantee by the Small Business Administration (“SBA”).
According to the three-count indictment, in January 2018, Non-Profit 1 entered into a fiscal sponsorship arrangement with SCB under which SCB provided administrative support for Non-Profit 1, including fiduciary services, governance, and funds management. In return, SCB received a regular payment from Non-Profit 1 for services rendered. The parties signed a Memorandum of Agreement that required SCB to deposit funds received on behalf of Non-Profit 1 into a restricted set of funding sources in SCB’s fiscal management system. Non-Profit 3 and Non-Profit 5 entered into similar fiscal sponsorship arrangements with SCB, including an agreement with each non-profit to deposit its funds into a set of restricted funding sources. SCB also had a fiscal sponsorship arrangement with Non-Profit 4 which contained an agreement by SCB to provide services with integrity and responsibility and noted that “funds must be disbursed according to strict IRS [Internal Revenue Service] standards.”
The indictment further alleges that SCB did not set up restricted funding sources for Non-Profit 1, Non-Profit 3, Non-Profit 4, and Non-Profit 5 as required by the Memoranda of Agreement, and instead deposited the funds into its general operating account.
The indictment alleges that Davis and others at SCB knowingly and willfully conspired to commit wire fraud by submitting false and misleading loan applications to the Small Business Administration, and knowingly and willfully laundered the proceeds of the fraud through the use of SCB’s bank accounts.
The indictment charges Reginald Davis with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, each punishable by up to 20 years in prison. Davis is also charged with one count of wire fraud, punishable by up to 20 years in prison.
Reginald Davis is expected to have an initial appearance in U.S. District Court in Baltimore at 1:30 p.m. this afternoon.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal law enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic. Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and certain other expenses, through the Paycheck Protection Program. PPP loan applications were processed and funded by participating lenders with a 100% guarantee by the Small Business Administration (“SBA”).
More than $1.4 million in COVID-19 CARES Act loan funds were fraudulently obtained through the scheme.
Related Federal Cases
- Owen M. Grigsby, Wire Fraud, Maryland 2024 · District of Columbia
- Matthew Lloyd Parker, PPP Loan Fraud, Michigan 2023 · Michigan
- David Godin, Wire Fraud and Aggravated Identity Theft, Maryland 2023 · Maryland
- Dent Hunter, CARES Act Scam, Louisiana 2020 · Washington
- Osakwe Ismael Osagbue, Mail and Wire Fraud, Maryland 2024 · Alabama
Key Facts
- State: Maryland
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
ðŸâ€Â’ Get the grimiest stories delivered weekly. Subscribe free →
