Five individuals were arrested in Kentucky, Indiana, and Colorado on Aug. 27 for allegedly participating in a scheme to fraudulently obtain approximately $1.6 million in COVID-19 relief funds, according to federal authorities.
The arrests are part of ongoing efforts to address misuse of pandemic assistance programs intended to support individuals and small businesses facing financial hardship during the COVID-19 pandemic. The U.S. Attorney's Office for the Western District of Kentucky prosecutes federal crimes and manages civil cases for the United States while partnering with law enforcement agencies to promote public safety and crime prevention. The office covers 53 counties and serves more than 2.2 million residents, according to the official website.
A federal grand jury indicted Kaelynn Greene, Camden Newton, Betty Walker (also known as Betty Bailey), Breanna Patterson, and Jordan Greene on charges including wire fraud, conspiracy to commit wire fraud, aggravated identity theft, and money laundering related to fraudulent applications for Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans. According to prosecutors, over two years Greene and Newton submitted false loan applications using their own names or stolen identities; Greene also conspired with others to recruit ineligible borrowers who then submitted fraudulent PPP loan applications claiming nonexistent businesses or inflating business activity.
Authorities say that more than 20 EIDL applications and over 50 PPP applications were filed on behalf of borrowers who did not qualify for these programs. This resulted in disbursement of over $850,000 in federal funds obtained through fraudulent means as well as attempts to secure an additional $750,000 that were ultimately declined.
U.S. Attorney Kyle G. Bumgarner said: "As part of the Department of Justice’s new National Fraud Enforcement Division, this indictment begins the process of holding five fraudsters accountable for their theft of hard-earned taxpayer dollars. These defendants allegedly took advantage of two federally funded programs designed to carry our country and its small businesses through unprecedented economic uncertainty by lying, cheating, and stealing. Their conduct will not be tolerated, and they will be aggressively prosecuted by this Office." The U.S. Attorney's Office is a component of the United States Department of Justice according to its official website.
Initial court appearances have taken place before a U.S Magistrate Judge in Louisville's Gene Snyder Courthouse—a facility used by the U.S Attorney's Office along with other courthouses across Owensboro, Bowling Green, and Paducah—while some defendants await scheduling.
The case is being investigated by TIGTA (Treasury Inspector General for Tax Administration), with Assistant U.S Attorney Nicole Elver prosecuting it.
According to its official website,the U.S Attorney's Office promotes community wellness through initiatives such as Heroin Education Action Team programs as well as Victim Witness Assistance services aimed at enhancing public safety throughout western Kentucky—including military installations at Fort Knox and Fort Campbell—and supporting local residents.
On April 7 prior to these indictments being returned by a grand jury April 8th—the Department of Justice announced formation of its National Fraud Enforcement Division tasked with investigating misuse or theft involving taxpayer dollars under President Trump's Task Force chaired by Vice President J.D Vance aiming at eliminating waste within Federal benefit programs.
All defendants are presumed innocent until proven guilty beyond a reasonable doubt.
