Jemel Lyles, 43, of Washington, DC, has been sentenced to 66 months in federal prison followed by three years of supervised release for conspiracy to commit wire fraud and aggravated identity theft. He was also ordered to pay $281,947 in restitution. The sentencing took place before District Judge Deborah L. Boardman in Greenbelt, Maryland.
Lyles pleaded guilty to submitting applications for and receiving funds from six fraudulent loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. According to court documents, these offenses occurred between April 2020 and February 2021 while Lyles was on supervised release for a previous federal conviction related to obstruction of an audit.
Kelly O. Hayes, U.S. Attorney for the District of Maryland, announced the plea along with Special Agent in Charge William J. DelBagno of the FBI’s Baltimore Field Office.
The CARES Act was enacted in March 2020 to provide emergency financial assistance during the COVID-19 pandemic through programs such as the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL). These initiatives were designed to help small businesses retain employees and cover other essential expenses.
According to his guilty plea, Lyles defrauded both the Small Business Administration (SBA) and PPP lenders by inflating employee numbers and payroll amounts on loan applications. He submitted false payroll documentation and tax records as part of this scheme. Under PPP rules at that time, businesses with reportable ownership by individuals with certain felony convictions were not eligible for funds; Lyles concealed his involvement or used another person’s identity on some applications.
Funds obtained through these fraudulent loans were used for personal expenses including a home gym, jewelry purchases, child-support payments, retail credit accounts, food costs, and personal investments.
The District of Maryland Strike Force is one of five strike forces established by the U.S. Department of Justice focused on investigating large-scale COVID-19 relief fraud schemes across multiple states. These teams use interagency cooperation led by prosecutors and data analysts to target criminal organizations involved in pandemic-related fraud.
U.S. Attorney Hayes commended the FBI’s investigative work: "U.S. Attorney Hayes commended the FBI for its work in the investigation." She also thanked Assistant U.S. Attorney Joseph L. Wenner for prosecuting the case as well as Paralegal Specialist Joanna B.N. Huber and members of the Maryland COVID-19 Strike Force.
For more information about reporting suspected COVID-19 fraud or about resources available through the Maryland U.S. Attorney’s Office visit https://www.justice.gov/usao-md or https://www.justice.gov/usao-md/community-outreach . Additional details about federal efforts against pandemic-related fraud can be found at https://www.justice.gov/coronavirus , where individuals can also report suspected fraud via hotline or web form.
