Two Houston men have been charged with trying to fraudulently sell 50 million masks for $317 million to a foreign government. Paschal Eleanya, 46 and Arael Doolittle, 55 are now in custody.
Last month, in a separate case, Doolittle was charged with defrauding investors out of $1.2 million by pretending to have deals with Chevron.
Pascal Eleanya is a supply chain and operations executive who has worked for DuPont, Baker Hughes and Huntsman Corporation.
Both are charged for their role in a scheme to sell 50 million 3M model 1860 N95 respirator masks they did not actually possess to a foreign government. They negotiated a sales price of $317 million. This was five times the public list price that 3M had set.
Based on their representations, the foreign government allegedly wired the funds to complete the purchase. However, authorities disrupted the transaction before it could be completed.
If convicted, both Doolittle and Eleanya face up to five years in prison for conspiracy and up to 20 years in prison for each of the two counts of wire fraud. Each of these charges also carry a possible $250,000 maximum fine.
The Secret Service conducted the investigation.
Six Houston-area men have been charged with fraudulently obtaining more than $16 million in Paycheck Protection Program (PPP) Loans. A seventh individual from Illinois was also charged.
The indictment alleges that the defendants filed at least 80 fraudulent PPP applications, seeking nearly $30 million in PPP loan funds. Ultimately about $16 million was funded.
Amir Aqeel, 52 was the ringleader. He would create the loan applications for shelf or inactive companies, working with the other defendants who owned many of them. Other companies were owned by unnamed and not charged individuals. For some of the loans, Aqeel would keep 33%, with the business owner getting the rest.
Unlike other PPP fraudsters, the defendants went further by writing purported paychecks to fake employees. Many of these were the defendants or their relatives. Aqeel’s 86-year-old mother (not charged) received checks from at least six different companies that received fraudulent PPP loans.
Over 1,100 fake paychecks, totaling over $3 million, were cashed at Almeda Discount Store in SE Houston, owned by one of the defendants.
With some of the proceeds, it is alleged that Aqeel bought a 2013 Lamborghini Gallardo Spyder and a 6,000 sq ft, $1 million house in Champion Forest.
Lola Shalewa Barbara Kasali, 22, of Houston, has been charged with fraudulently obtaining more than $1.9 million in Paycheck Protection Program (PPP) loans.
The complaint alleges that Kasali submitted at least two fraudulent PPP loan applications. One for an entity called Lola’s Level and the other in the name of Charm Hair Extensions. Kasali allegedly received more than $1.9 million in PPP loan funds following the approval of the Lola’s Level application.
The charges allege that after receiving the funds, Kasali transferred the money into four additional bank accounts. Authorities were later able to seize the funds, according to the charges.
The loan applications allegedly asserted both Charm Hair Extensions and Lola’s Level had numerous employees and significant payroll expenses. According to the charges, however, neither entity has employees nor pays wages consistent with the amounts claimed in the loan applications.
According to the PPP loan database of loans over $150,000 that is published by the Small Business Administration, there is one loan approved for Lola’s Level but none for Charm Hair Extensions.
The bank that approved the Lola’s Level loan was Radius Bank of Boston. That bank was also involved in partially funding the PPP loans of a Houston man now charged with buying a Lamborghini with his funds.
Oluwole Odunowo has been sentenced to 54 months in federal prison for his role in a nationwide conspiracy to commit mail fraud and aggravated identity theft. In May 2020, he pleaded guilty before a court in Oregon.
The IRS began investigating in May 2013, when a woman in Medford, Oregon notified the IRS that false federal and state tax returns were filed electronically. The IRS found that co-conspirators amassed a large supply of stolen U.S. taxpayer identities; obtained IRS filing PINs using victim identities; acquired prepaid debit cards in victims’ names; used fictitious email addresses; filed fraudulent tax returns and wired refund proceeds to Nigeria.
The scheme ran between 2012 and 2015 and netted co-conspirators more than $11.6 million in fraudulent tax returns. Odunowo used 700 stolen identities and filed fraudulent returns seeking over $1.5 million in refund payments. He received refunds totaling $403,000.
According to the Medford Mail Tribune, the scheme began when a Vietnamese hacker got into the databases of CICS Employment Services of Lincoln City, Oregon. He sold 91,732 identities to the ringleader, Emmanuel Kazeem of Maryland. Mr Kazeem was sentenced to 12 years in 2018. Kazeem’s younger brother, Michael, who lived in Georgia, got 7 years in November 2017. Three other Nigerians living in Georgia have also been sent to prison, along with a Wisconsin man, Curtis Pethley.
Because of security breaches tied to Kazeem’s ring, the IRS disabled its “Get Transcript” program in 2015. It was relaunched the following year, with additional security features.
A Houston Funeral Director, Jase Gautreaux, has been charged with fraudulently seeking over $13 million in Paycheck Protection Program (PPP) loans.
Mr Gautreaux allegedly submitted several fraudulent loan applications to multiple banks. He applied on behalf of a business that did not exist and sought loans for a business with which he had no affiliation. He allegedly falsified the number of employees, payroll expenses, tax documents and bank account information. Mr Gautreaux ultimately received over $1.6 million in PPP funds.
Mr Gautreaux, 38, is currently a Funeral Director at Wingate Funeral Home. According to LinkedIn, until January 2020, he spent 11 years in Procurement at Tema Oil and Gas (which became part of Rosehill Resources in 2017). During that time, he also appeared to operate his own funeral home business.
Bank fraud is a crime punishable by up to 20 years in prison. Making a false statement within the jurisdiction of a federal agency carries a potential maximum sentence of five years in prison.
In the past day, there were a number of other people around the country who were charged with PPP fraud. These included;
- Virginia couple ($1.4 million paid out), arrested as they attempted to flee to Poland.
- Dayton, Ohio businesswoman ($1 million paid out but flagged and recalled by the bank).
- New York opthalmologist ($630,000 paid out) already under indictment for healthcare fraud.
- ‘Arkansas Mo’, who appeared in Love & Hip Hop: Atlanta ($3.7 million). He used some of the money to lease a Rolls-Royce
- Fahad Shah, a Dallas-area man, was charged with a fraudulently seeking $3 million in PPP loans. He allegedly used part of the money to buy a Tesla.
The Texas Health and Human Services Commission has agreed to pay the federal government $15.3 million to resolve allegations that it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP). SNAP was known as the Food Stamp program until 2008.
Under SNAP, the US Department of Agriculture provides eligible low-income individuals and families with financial assistance to buy nutritious food. Although the federal government funds the benefits, it relies on the states to determine whether applicants are eligible and to administer the scheme.
Furthermore states are required to perform quality control to ensure that eligibility decisions are accurate. The federal government also pay performance bonuses to those states that report the lowest error rate and the most improved error rate. The state of Texas contracted with Julie Osnes Consulting LLC (based in South Dakota) to provide advice and recommendations designed to lower its quality control error rate. The federal government alleged that the recommendations injected bias into the quality control process, resulting in the state receiving performance bonuses in 2010, 2013 and 2014 for which it was not entitled.
This is the fourth state that the Federal government has settled with. All hired Osnes Consulting. The other states are Virginia ($7 million), Wisconsin ($7 million) and Alaska ($2.5 million). The government has also settled with Julie Osnes herself ($0.8 million). The state of Mississippi is also under investigation.
Although the details concerning the Texas program have not been released, from reporting in other states, it is alleged that the consulting firm would pressure state employees to either reclassify errors as correct or omit them from the sample. The states would select a quality control sample and the federal government would audit a subset of the state’s sample.