Former Government Loan Specialist Pleads Guilty to Directing Fraudulent Requests for CARES Act Funds | New
MOBILE, Alabama (WALA) – Former government employee accused of costing taxpayers hundreds of thousands of dollars in money meant to help small businesses during the COVID-19 pandemic pleaded guilty to federal charges on Monday.
Karderrius Phelion worked from his mobile apartment as a loan specialist with the Small Business Administration. He admitted to using his position to guide friends and relatives to make fraudulent requests for funds made available by the CARES (Coronavirus, Aid, Relief and Economic Security) law.
Phelion has pleaded guilty to conspiracy, wire fraud and aggravated identity theft. He faces a likely prison sentence, although a judge will determine the precise sentence. Prosecutors agreed to recommend a lower end of the advisory guidelines.
Four other defendants have either pleaded guilty or announced their intention to do so: Khadijah Tate, Kashunte Tate, Courtney Phelion and Brittney Bettison. Charges are pending against a sixth defendant, Jeremiah Kelly.
Karderrius Phelion’s plea agreement accepts the allegations set out in the indictment in their entirety:
Phelion and Jérémie Kelly: In a loan, Phelion admitted that he and Kelly had filed fraudulent documents indicating that the Jeremiah Kelly Foundation was a charity operating since 2018 with four employees and $ 432,158 in income over the previous 12 months. The Small Business Administration ended up sending $ 149,900 to Kelly’s savings account on behalf of the charity.
Phelion and Khadijah Tate: Phelion helped Tate file a fraudulent loan application for Blossom Floral Boutique, a company said to have had eight employees and sales of $ 620,000 in the previous 12 months. The Small Business Administration sent wire transfers of $ 149,900 and $ 8,000 to a bank account Tate had recently opened.
Tate and Phelion have filed fraudulent claims on behalf of several other companies, including Grace Travel Agency, Khadijah’s Prayed and Layed, and Dash Floral Boutique.
Phelion and Kashunte Tate and Courtney Phelion: Another fraudulent application concerned Immanuel Housing Mobile, an allegedly non-profit organization. Phelion, along with co-defendants Kashunte Tate and Courtney Phelion, submitted bogus loans for this organization and Grace Travel Agency, receiving $ 5,000 and $ 3,000 respectively.
Phelion and Brittney Bettison: Phelion and Brittney Bettison submitted fraudulent claims on behalf of a company called The Bettisonm receiving $ 135,000, and Origins Transit and Event Modnern, receiving deposits of $ 5,000 and $ 72,400.
The plea deal quotes text messages showing how Phelion guided Bettison through the loan application process. The document quotes a text from June 16 where he wrote to Bettison: “Let me know when you’re ready, I’ll tell you what amounts to go in.” “
On July 3rd, Bettison wrote, “So baby we need the numbers for an extra $ 75,000 lol .: Pehlion replied,” Okay, get Bri to start working on a new website.
Five days later, the advocacy document says, Phelion warned Bettison, “Delete our thread. “
The aggravated identity theft charge stems from what Phelion admitted to be efforts by him and Khadijah Tate to use the name and Social Security number of Phelion’s late great-grandmother in application documents loan.
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