Woman Pleads Guilty to $3.5M COVID Relief Scam

Woman Admits Multimillion-Dollar COVID-19 Relief Program Fraud Scheme.Photo byMorristown Minute

Lisa Smith Pleads Guilty to Conspiring in Bank Fraud Scheme Involving PPP Loans

CAMDEN, N.J. – Lisa Smith, 61, of Cornelius, North Carolina, has admitted to her role in a fraudulent scheme involving over $3.5 million in Paycheck Protection Program (PPP) loans. U.S. Attorney Philip R. Sellinger announced today that Smith pleaded guilty before U.S. District Judge Karen M. Williams in Camden federal court on July 17, 2024, to a charge of bank fraud conspiracy.

Details of the Fraud Scheme

According to court documents and statements, Smith conspired to submit fraudulent PPP loan applications for two companies she controlled in early 2021. The applications contained falsified bank statements, fake IRS tax forms, and grossly exaggerated employee numbers and payroll expenses, resulting in Smith securing $125,000 in PPP loans.

Smith also collaborated with conspirators to recruit individuals with minimally operational or non-operational companies. She assisted these individuals in submitting fraudulent PPP loan applications, similarly falsifying bank statements, tax forms, and misrepresenting employee numbers and payroll expenses. This deceptive strategy led to the approval and funding of over 25 PPP loans totaling more than $3.5 million. Smith received a portion of the loan proceeds as her compensation for facilitating the fraud.

Legal Proceedings and Sentencing

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. Smith's sentencing is scheduled for November 21, 2024.

Investigation and Acknowledgments

U.S. Attorney Sellinger credited the collaborative efforts of various agencies for their investigation leading to Smith's guilty plea:

• Federal Deposit Insurance Corporation – Office of the Inspector General, New York Region, under Special Agent in Charge Patricia Tarasca
• FBI’s South Jersey Resident Agency, under Special Agent in Charge Wayne A. Jacobs in Philadelphia
• Social Security Administration, Office of the Inspector General, Boston-New York Field Division, under Acting Special Agent in Charge Bradley Parker
• U.S. Department of Labor, Office of the Inspector General, New York Region, under Special Agent in Charge Jonathan Mellone

The government is represented by Assistant U.S. Attorney Daniel A. Friedman and Jason M. Richardson, Attorney in Charge of the U.S. Attorney’s Office’s Camden Office.

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