Couple behind “My Buddy Loans” indicted for electronic fraud and aggravated identity theft – Orange Leader

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System presumed to be involved Unique The greatest number of fraudulent individuals EIDL applications associated with the CARES law

TEXARKANA, Texas – In Liberty County, Texas, a man and woman have been charged with filing hundreds of fraudulent economic disaster loan (EIDL) applications with the Small Business Administration (SBA) as part of the Aid, Relief and Economic Security (CARES) Acting in the Eastern District of Texas, Acting US Attorney Nicholas J. Ganjei announced today.

Clifton Pape, 45, and Sally Jung, 58, both of Cleveland, Texas, allegedly operated a COVID relief fraud program known as “My Buddy Loans,” which grossed them over $ 700,000 in proceeds of fraud and resulted in a loss of at least $ 1.3 million in the United States. Pape and Jung are indicted in federal indictment that charges violations of 18 USC §§ 1349 and 2326, conspiracy to commit telemarketing wire fraud victimizing ten or more people over fifty-five year ; 18 USC § 1343, wire fraud; and 18 USC §§ 1028A and 2, aggravated identity theft and aiding and abetting.

“We believe this investigation, to date, concerns the largest number of individual fraudulent EIDL claims associated with the CARES Act,” said Acting US Attorney Nicholas Ganjei. “We are asking those with information about the My Buddy Loan fraud program, including those who believe they may be victims, to call the Department’s National Disaster Fraud Enforcement Center hotline. Justice at 866-720-5721 or file a complaint using the NCDF website. Complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

“This telemarketing program exploited those seeking help during the COVID pandemic, many of whom were over the age of 55,” said SBA OIG Central Region Special Agent Sharon Johnson. “We call on members of the press and the community to encourage those victims of this fraud scheme, including hundreds of residents of Texas and across the country, to file a complaint with the NCDF.”

“This case demonstrates the investigative capabilities of the United States Secret Service and is expected to have a strong deterrent effect on anyone considering participating in a similar scam,” said William Mack, resident special agent in charge of the service’s residents’ office. secrets Tyler Texas. “This investigation highlights our exceptional partnership with the Central SBA OIG region and we will continue to work with our law enforcement partners to disrupt the criminal groups that target and victimize our communities. We thank members of the public and the banking community who have been vigilant, and we encourage them to continue to report any suspicious activity involving relief from COVID. “

According to court documents filed with the U.S. District Court in Texarkana, Pape and Jung operated the telemarketing program under the name My Buddy Loans. In return for a fee, My Buddy Loans took the victims’ personal identification information and promised to apply for a farm grant, which they said was available to those who owned a few acres of land. Instead, Pape and Jung actually filed fraudulent EIDL claims with the SBA that contained the victims’ personally-identifying information.

Pape and Jung used Square’s credit and debit card processing service to bill third-party charges. Pope and Jung have successfully completed at least 700 charges, earning at least $ 700,000 in fees. Pape and Jung then transferred the proceeds of the fraud scheme to a bank account they controlled. On one occasion, Pape used the proceeds of fraud to pay for a traffic ticket. On another occasion, Pape and Jung used more than $ 3,600 from the fraud scheme to pay for a stay at a resort in San Antonio, Texas. A photo from this trip shows Pope and Jung celebrating over sparkling wine. Under a warrant of seizure, officers seized the $ 505,535.04 in fraud proceeds that remained in the account.

The CARES Act is a federal law enacted in March 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was authorization or advances from EIDL and low interest loans to small businesses to meet financial obligations and operating expenses that could have been covered if the catastrophe had not taken place. Under the EIDL program, applicants were eligible for a repayable advance of up to $ 10,000 if they had ten or more employees.

A federal indictment is just an indictment. An accused is presumed innocent until proven guilty.

Under federal law, Pape and Jung face up to 168 years in federal prison and a fine of $ 6,000,000 upon conviction. The legal sentence prescribed by Congress is provided here for your information, as the sentence will be determined by the court based on the Sentencing Advisory Guidelines and other statutory factors.

This case is currently under investigation by the US Secret Service and the Office of the Inspector General of the SBA. The case is being pursued by US Deputy Prosecutor Jonathan R. Hornok.

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