A Michigan resident, Malcolm Culmer, has pleaded guilty to charges of wire fraud and money laundering related to a scheme that targeted COVID-19 pandemic relief programs. The plea was entered before Chief U.S. District Judge David Bunning in Covington, Kentucky.
The case centers on fraudulent applications for relief funds established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020. This federal legislation created new unemployment compensation programs and expanded existing ones such as the Economic Injury Disaster Loan (EIDL) Program through the Small Business Administration to assist those affected by the economic impact of the pandemic.
According to court documents, from April 2020 to July 2021, Culmer submitted false information regarding employment history, residence, and business ventures to obtain government relief funds. He filed eight EIDL applications for fictitious companies, seeking more than $1 million in loans; $187,500 was approved. Additionally, Culmer applied for pandemic unemployment benefits in Kentucky using false statements and received $39,496.
On the money laundering charge, authorities say Culmer used over $10,000 in illicitly obtained funds for cash withdrawals, transferring money between accounts, and purchasing vehicles to expand a rental business.
Paul McCaffrey, Acting United States Attorney for the Eastern District of Kentucky; Joseph V. Cuffari Ph.D., Inspector General with the Department of Homeland Security (DHS-OIG); and Mathew Broadhurst, Special Agent in Charge at the U.S. Department of Labor Office of Inspector General (DOL-OIG), Southeast Region made a joint announcement regarding the guilty plea.
"The investigation was conducted by DHS-OIG and DOL-OIG. Assistant U.S. Attorney Brittany Dunn-Pirio is prosecuting the matter on behalf of the United States."
Culmer is scheduled for sentencing on December 16 and could face up to 20 years in prison. The final sentence will be determined after consideration of federal guidelines and statutes.
In May 2021, the Attorney General launched the COVID-19 Fraud Enforcement Task Force to coordinate efforts across government agencies against pandemic-related fraud. More information about these initiatives can be found at https://www.justice.gov/coronavirus.
Individuals with knowledge of attempted COVID-19 fraud are encouraged to report it via phone or through an online complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
