PHILADELPHIA – United States Attorney Jennifer Arbittier Williams and Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division announced that Barrie Osborne, 76, of Celebration, Florida, was charged by Indictment with with conspiracy to commit wire and bank fraud, wire fraud, bank fraud, and conspiracy to commit money laundering in connection with a scheme to fraudulently obtain more than $7 million in Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loans (EIDL) and pre-pandemic Small Business Administration (SBA) loans, and to launder the proceeds of the illegal scheme.
The Indictment alleges that, beginning in about January 2018 until August 2021, the defendant, a professional tax preparer, conspired with at least eight California-based individuals to apply for SBA, PPP, and EIDL loans on behalf of their respective businesses. All of the businesses in question were dormant companies or companies with limited business operations. In exchange for fees, Osborne allegedly made the businesses appear to be functioning companies with operations and employees by creating fake documents, including fake bank statements and fictitious tax documents. The defendant also provided a “script” to scheme participants to use in calls with lenders. Osborne and the California co-conspirators allegedly obtained over $7.3 million in PPP, EIDL, and SBA loans.
The Indictment further alleges that the defendant created “forgiveness plans” which were designed to disguise the fraud proceeds as payroll expenses in order to make it appear that each loan recipient was meeting the SBA requirement to devote a percentage of the PPP funds to payroll. This increased the likelihood that each loan recipient – including one of the defendant’s own companies – would qualify for loan forgiveness.
“PPP, SBA and EIDL funds are intended to help American small-businesses continue paying their employees, even if revenues have dropped dramatically,” said U.S. Attorney Williams. “Thieves who attempt to take these funds are taking advantage of others’ misfortune – ripping them off while also ripping off all taxpayers who fund the program. As alleged, Osborne led a conspiracy to fraudulently obtain $7 million in funds that could have helped struggling businesses and individuals.”
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
This case was investigated by the Small Business Association Office of Inspector General, IRS-Criminal Investigation Philadelphia, Homeland Securitu Investigations’ Philadelphia Field Office, and the FBI’s Philadelphia Field Office, and is being prosecuted by trial attorneys David A. Stier and Patrick B. Gushue of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant United States Attorney Judy G. Smith for the Eastern District of Pennsylvania.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.