A former Mount Vernon CSEA president and her daughter are hoping to avoid incarceration in a pandemic relief scheme that bilked the U.S. Small Business Administration out of nearly $1.7 million and are asking a federal judge to sentence them only to two years of home confinement.
Lawyers for Andrea and Alicia Ayers argue that prison terms would be too onerous for the pair and their family, as Andrea cares for her ailing mother and Alicia is a single mom to a 9-year-old son and 2-year-old daughter.
But prosecutors want a prison term of between 5 1/3 and 6 1/2 years, calling the fraud a brazen scheme hatched through greed.
U.S. District Judge Nelson Roman will sentence the pair Friday in White Plains federal court. The prosecution's request corresponds to the sentencing guidelines for the pair, which Roman must consider but is not bound by.
Mother and daughter were like others around the country who took part in get-rich-quick schemes in the spring of 2020 when the SBA hurriedly tweaked its Economic Injury Disaster Loan program as a way to keep small businesses afloat when the coronavirus pandemic struck.
The agency offered not only loans but grants of $1,000 per employee up to $10,000 for eligible businesses. The Ayerses collected pedigree and bank account information from friends, relatives and others and submitted applications for the $10,000 grants, usually creating businesses that did not exist and certainly didn’t have 10 employees.
They took $2,000 to $4,000 from the recipients each time the grant was paid out. Unlike with the EIDL loans, the grants did not have to be repaid.
Pair filed 315 online applications in weeks
The pair's criminal conduct, assisted by friend Traci Proctor, lasted less than three weeks in June and July 2020, but during that time they filed 315 online applications seeking more than $3 million. All three were arrested in March 2021 and the Ayerses were later indicted on charges of wire fraud, conspiracy to commit wire fraud, false statements and aggravated identity theft. They pleaded guilty a year ago, but a new plea was needed after a U.S. Supreme Court ruling in an unrelated case limited how prosecutors could bring the identity theft charge.
That spared mother and daughter a mandatory minimum two years in prison.
The money the Ayerses pocketed — and how much their scheme cost the SBA — was significantly less than a similar fraud perpetrated by two Mount Vernon brothers and a friend who grew up in the city. Quadri and Anwar Salahuddin and Jacob Carter were convicted in February on wire fraud and identity theft charges for steering nearly $8 million in EIDL grants to hundreds of people for whom they filed fraudulent applications. The trio is suspected of pocketing more than $2.5 million in kickbacks. They face up to 20 years in prison when sentenced next month.
Both Andrea and Alicia Ayers have agreed to forfeit $1.69 million.
Lawyers say Ayerses have taken responsibility
Throughout his sentencing submission, lawyer Deveraux Cannick referred to Alicia Ayers’ crime as an “error in judgement", one he said was "aberrational" to an otherwise "industrious, positive and productive life." Ayers is a single mother who was raised by a single mother and worked as an accountant and ran a travel service.
"She has taken full responsibility for her conduct," he wrote. "She beats herself up day and night for her poor judgement. She is embarrassed. She is petrified about the notion of incarceration and the impact it would have on her children."
Andrea Ayers, 56, worked as a civilian code enforcement officer in the Mount Vernon Police Department and also ran a catering service. She is the daughter of the late Allen Ayers Jr., a highly-regarded police detective and community mentor who founded Mount Vernon’s Youth Community Opportunity Program.
Her lawyer, Royce Russell, wrote that she remains tormented by the look on her father's face when he learned the FBI was raiding their home and she was being arrested. Allen Ayers died five months later.
He said that her friends and associates were knowing participants in the fraud scheme but that it was because of their trust in Ayers and her role in it.
"She blames no one for her unlawful conduct," Russell wrote to Roman. "She would like this Court to know her criminal conduct does not define who she is or will become in the future. She seeks a second chance to prove her worth."
Prosecutors cite seriousness of the crime
In asking for a guidelines prison term, prosecutors Courtney Heavey and Jeffrey Coffman cited the serious nature of the crime and the need for deterrence. They also pointed to the defendants' refusal to provide financial statements that would allow the government to identify assets to recover.
And they disputed the contention that mother and daughter had fully accepted their responsibility. Rather, prosecutors argued, the defendants stopped their criminal conduct not because they were remorseful but because banks started freezing accounts of individuals who had received money intended for businesses and the EIDL ran out of money.
Once the defendants learned the banks were freezing accounts, prosecutors argued, Andrea in one case sought to create fake invoices and lie to the bank to suggest that the applicant really did own a business. And she made threatening remarks to one applicant who had gone to police and the SBA to report the fraud.
Andrea's crime was a result of greed, not need, the prosecutors argued, as she enjoyed a full-time job with a police department that was not affected by the pandemic. "But she was willing to tell lie after lie and certify to the accuracy of her statements all so that she could get more and more money from the Government," they wrote.
They said that Alicia Ayers last year had taken a job at Intuit, which gave her access to people's personal information, in violation of her bail conditions. The company was unaware of her pending criminal case and fired her when notified of it by the government, the prosecutors said.
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