Former Dallas County Prosecutor Charged with Federal COVID Fraud

When the COVID-19 pandemic hit in 2020, the Paycheck Protection Program (PPP) was a lifeline for more than 11 million businesses, many of which saw their revenues take a huge plunge due to the illness and the efforts to limit its reach. Under the PPP, approximately $800 billion worth of low-interest loans were distributed with the promise that they would be forgiven if at least 60 percent of the funds were used for authorized costs within the relevant timeframe. 

With so much money being sent out so quickly, many questions were raised about potential fraud, and the Small Business Administration has conducted audits of all PPP loans valued at $2 million or more. Moreover, the Department of Justice (DOJ) is actively prosecuting individuals and companies accused of defrauding the PPP.

One such case involves a former Dallas County prosecutor accused of illegally accepting about $20,800 in COVID-era small business loans while she was working in the district attorney’s office, according to a federal indictment. It is alleged that Thelma Anderson claimed to have payroll expenses even though prosecutors say she was her company’s only employee. Anderson is also accused of providing a fake IRS form, declaring more than $142,700 in gross sales for 2019. The loan was forgiven, but the government now states that Anderson spent the money on personal expenses, including rent, food and entertainment.

Several types of alleged fraud have been common in PPP prosecutions, such as: 

• Inflating payroll expenses — Some businesses falsely claimed to have more employees or higher payroll expenses than they actually did in order to qualify for larger loans.

• Using loan proceeds for unauthorized purposes — PPP loans were intended to be used for payroll, rent, utilities and other approved expenses. Some businesses used the money for personal expenses or other unauthorized purposes.

• Creating fake businesses — Some individuals created fake businesses in order to apply for PPP loans.

A conviction for PPP fraud can have severe consequences, including fines, restitution and even incarceration. With the wave of stories regarding misuse of the program, there is a significant danger that an overzealous prosecutor might bring an unwarranted charge. If you’re accused of PPP fraud, your first step should be to contact an attorney with a successful track record defending Texans accused of federal crimes. 

Kevin L. Collins, P.C. in San Antonio provides strong defense representation to clients in a wide range of federal criminal cases, including fraud prosecutions. For a consultation with a Board-certified Texas criminal law attorney, please call +12102239480 or contact us online. 

By Kevin L. Collins | Published July 1, 2024 | Posted in COVID-19, Federal Investigation | Tagged COVID, Fraud, PPP