SEATTLE – A 30-year-old New York City man was sentenced to 42 months in prison for his role in a COVID-19 Pandemic Paycheck Protection Program (PPP) loan scam. Donte McClellon, 30, of Seattle, was found guilty of three counts of wire fraud and two counts of bank fraud.
Mcclellon submitted falsified documents to obtain $500,948 in loan proceeds from three different financial institutions in May and June 2020. The loan proceeds were meant to help struggling small businesses weather the COVID-19 pandemic, but Mcclellon used the money to fund his own investments and personal expenses.
U.S. District Judge Lauren King noted that the societal costs of Mcclellon’s crimes are serious, saying that the crimes affected taxpayers and diverted funds from struggling small businesses. Mcclellon never accepted responsibility for his crimes, and the judge added that he used the money for personal luxuries, including rent on a Manhattan apartment, travel, gym memberships, and $20,000 in Uber rides.
‘The negative effects of Mcclellon’s crime go beyond the financial loss,’ said U.S. Attorney Tessa M. Gorman. ‘His fraudulent applications clogged an overtaxed application system and stole valuable resources from lending institutions working tirelessly to distribute money.’
The case was investigated by The FBI Seattle Field Division with assistance from FBI New York and the Small Business Administration Office of Inspector General (SBA-OIG). The case was prosecuted by Assistant United States Attorneys Lauren Watts Staniar, Jessica Murphy Manca, and Krista Bush.
The Attorney General established the COVID-19 Fraud Enforcement Task Force in May 2021, to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.
Mcclellon used the names of three inactive limited liability corporations he had once registered in the State of Washington to make his claims. He submitted Paycheck Protection Program applications claiming the entities each had as many as 13 employees and, in one case, gross receipts of more than $1.6 million. The investigation revealed that there was no business activity at the address Mcclellon claimed the businesses operated out of – his home address in Seattle.
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Key Facts
- State: Washington
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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