Sentence includes 2 years in federal prison and a year of home confinement as part of a plea agreement for wire fraud conspiracy to secure COVID-19 relief funds.
The owner of an assisted living community in Maryland will spend two years in federal prison as part of a plea agreement for fraudulently obtaining more than $1 million in COVID-19 relief funds used for personal gain. Reginald Alphonso Hopkins of Prince George’s County, MD, pleaded guilty on Sept. 27 and was sentenced Wednesday on a charge of wire fraud conspiracy relating to fraudulent claims that he and a co-conspirator made through the Small Business Administration’s Paycheck Protection Program, or PPP, under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, according to the US Attorney’s Office for the District of Maryland.
The plea agreement states that Hopkins fraudulently obtained more than $1 million in PPP funds and $9,000 in Economic Injury Disaster Loan, or EIDL, funds for various businesses, including an assisted living community, a transportation business and a car sales business. He also attempted to fraudulently obtain more than $3.1 million in PPP and EIDL funds, according to the government.
Between June 11, 2020, and March 23, 2021, Hopkins and an unnamed co-conspirator allegedly submitted fraudulent PPP loan applications for Prestige Assisted Living Inc., Prestige Executive Transportation and Prestige 24/7 Auto Sales & Services LLC. None of those businesses are related to Prestige Senior Living / Prestige Care.
Each loan application, according to the government, contained “material misrepresentations,” including the number of employees and average monthly payroll. In fact, IRS records showed that none of the companies reported paying wages to any employees. Fabricated IRS tax forms and bank records also were submitted with the applications, the government said.
The loan application for the assisted living community included a fabricated IRS form that falsely claimed the entity paid more than $2 million in wages to 24 employees in 2019, according to the DOJ. The facility did not obtain a license to operate until Dec. 18, 2020, was only authorized to have four beds, and never paid wages to any employees.
Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and other pandemic-related expenses. The SBA also offered an EIDL loan or advance to help businesses meet their financial obligations. EIDL advances, which did not have to be repaid, could be obtained even without an EIDL loan approval.
Based on those fraudulent submissions, the government said, the PPP loans were distributed to bank accounts controlled by Hopkins, who paid his co-conspirator $177,000 in kickbacks that came from 10.5% of the Prestige Assisted Living loan, 20% of the loan amount for Prestige Executive Transportation, and 25% of the Prestige 24/7 loan.
Hopkins also provided PPP funds to various friends and family members, paid off various personal debts and made large cash withdrawals for himself, according to the government. He reportedly spent $30,000 of the PPP funds to buy B&G Auto Repair LLC, for which he also planned to obtain a fraudulent PPP loan.
Hopkins also reportedly conspired to fraudulently obtain PPP loans for various other businesses, including Prestige Executive Protection Services LLC, Prestige Paradise Promotions LLC, Prestige Executive Protection Services II LLC, Prestige Real Estate & Development LLC, and B&G Auto Repair LLC. Those loans never closed.
In addition to the PPP loans, Hopkins also submitted several fraudulent EIDL applications, which ultimately were declined, according to the government, but he received an EIDL advance of $5,000 for Prestige Executive Transportation and $4,000 for Prestige Executive Protection Services II.
Along with the prison term, Hopkins was sentenced to a year of home confinement as part of three years of supervised release.