38-Year-Old Louisiana Man Faces the Possibility of Prison Time and a Fine if Convicted of Multiple Charges of CARES Act Fraud

New Orleans, Louisiana – A 38-year-old Louisiana man faces the possibility of prison time and a fine if convicted of multiple charges of CARES Act Fraud.

On March 20, 2023, U.S. Attorney Duane A. Evans announced that Ernest X. Taylor, Jr. of LaPlace, Louisiana, age 38, was indicted on March 17, 2023, by a federal grand jury for two counts of making false statements related to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The CARES Act went into effect on March 27, 2020, and it established many new temporary initiatives and authorized for the expansion of others to address the COVID-19 pandemic. Among these initiatives, the Paycheck Protection Program (PPP) provided forgiven loans to small businesses backed by the U.S. Small Business Administration (SBA) to retain workers and maintain payroll, make mortgage interest payments, lease payments, and utility payments. The PPP allows for the forgiveness of interest and principal on the PPP loan if the business spends the loan proceeds on these expense items within a specified period of time after receiving the proceeds and spends at least a set percentage of the PPP loan proceeds on payroll expenses.

According to court records, Taylor made false representations to an approved lender on or about March 2, 2021, in order to get a PPP loan fraudulently. Taylor falsely claimed in his PPP application that he had not been convicted of any felony involving “fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance” within the last 5 years.
Taylor, in fact, pleaded guilty in the Eastern District of Virginia in 2016 to conspiracy to commit federal student loan fraud and mail fraud in a scheme involving stolen identities. Taylor collected about $18,500 as a result of these misrepresentations. Taylor subsequently submitted the same fraudulent representations to an approved lender when he asked for a second draw PPP loan on or about April 21, 2021. Taylor was paid about $18,5000 for the second loan.

Taylor faces up to five years in prison, $250,000 in fines, and three years of supervised release on each count of false statements. There is also a necessary special assessment cost of $100 per count that must be paid following conviction.

U.S. Attorney Evans emphasized that an indictment is only a charge and that the defendant's guilt must be established beyond a reasonable doubt.

Please visit https://www.justice.gov/coronavirus for more information on the Department of Justice's response to the epidemic. Anyone with information about allegations of attempted fraud involving COVID-19 can contact the Department of Justice's National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or submit a complaint using the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

United States Attorney Evans lauded the work of the US Secret Service in investigating this case. The prosecution is being handled by Assistant U.S. Attorney Edward J. Rivera of the Financial Crimes Section.