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Maryland Man Facing Federal Indictment For Fraudulently Obtaining $3.5 Millions In COVID Relief Funds

September 27, 2021 / Source: FDIC OIG

PRESS RELEASE

FOR IMMEDIATE RELEASE

Maryland Man Facing Federal Indictment For Fraudulently Obtaining $3.5 Millions In COVID Relief Funds

Law Enforcement Seizes an Additional $1.5 Million in Alleged Fraudulent Funds

Greenbelt, Maryland – A federal grand jury has returned an indictment charging Rudolph Elwood Brooks, Jr., age 45, of Bowie, Maryland, with federal wire fraud and money laundering charges.

The indictment was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner; Special Agent in Charge Shimon R. Richmond of the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC OIG); Acting Special Agent in Charge Darrell Waldon of the Internal Revenue Service - Criminal Investigation (IRS-CI), Washington, D.C. Field Office; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; and Inspector General Hannibal “Mike” Ware of the U.S. Small Business Administration Office of Inspector General (SBA OIG).

The nine-count indictment charges Brooks with three counts of wire fraud relating to Brooks’ transmission of loan applications submitted through the Paycheck Protection Program (“PPP”) in the names of three entities controlled by Brooks:  Cars Direct by Gavawn HWD Bob’s Motors (“Cars Direct”), Madaro, LLC (“Madaro”), and Kingdom Tabernacle of Restoration of Ministries (“Kingdom Tabernacle”).  As alleged in the indictment, Brooks electronically submitted PPP loan applications in the name of Cars Direct, Madaro and Kingdom Tabernacle containing false statements regarding the number of employees and payroll expenses of the entities.  In support of the PPP loan applications, Brooks also submitted false tax forms not on file with the Internal Revenue Service.

On May 9, 2020, the Cars Direct PPP loan was approved and on May 12, 2020 $1,556,589 in loan proceeds were deposited into an account controlled by Brooks.  On May 11, 2020, the Madaro PPP loan was approved and on May 13, 2020 $204,266 in loan proceeds were deposited into an account controlled by Brooks.  On May 14, 2020, the Kingdom Tabernacle PPP loan was approved and on May 15, 2020 $1.8 million in loan proceeds were deposited into an account controlled by Brooks. 

In total, on the basis of the false and fraudulent PPP loan applications, Brooks obtained at least $3,560,855 in PPP loan proceeds.  Brooks used the PPP loan proceeds for his personal benefit and on payments and purchases not permissible under the Paycheck Protection Program, including payments for a residence, the purchase of a luxury vehicle, purchases at restaurants, retail stores, grocery stores, cash withdrawals and transfer to other bank accounts controlled by Brooks.

The indictment also charges Brooks with three counts of money laundering for wire transfers derived from the criminal proceeds of the PPP loans that were used for the purchase of a 2018 Tesla Model 3, a real property in Baltimore, Maryland, and a real property in Upper Marlboro, Maryland.  The indictment also charges Brooks with three counts of money laundering for the April 5, 2021 purchase of three $100,000 cashier’s check payable to “Rudolph Brooks” from the proceeds of the fraudulent PPP loans.

To date, the United States has recovered more than $1.6 million in proceeds of the fraudulent PPP loans as well as a 2018 Tesla Model 3 purchased with proceeds of the Cars Direct PPP loan.  As alleged in the indictment, if convicted, the United States will seek forfeiture of the seized property as well as the Upper Marlboro, Maryland property purchased with fraud proceeds.  The United States also filed a parallel civil forfeiture complaint against the Upper Marlboro, Maryland property on August 12, 2021 alleging that the property was purchased with more than $500,000 in proceeds traceable to the Kingdom Tabernacle and Cars Direct PPP loans.

As detailed in the indictment, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted in March 2020 to provide emergency financial assistance to the millions of Americans suffering from the economic consequences of COVID-19.  The CARES Act authorized up to $659 billion in forgivable loans to small businesses for employee retention and certain business expenses through the Paycheck Protection Program (“PPP”).  The business must use PPP loan proceeds on payroll costs, mortgage interest, rent, and utilities.  Initially, the program allowed the principal to be forgiven if the business spent the loan proceeds on qualifying expenses within eight weeks of loan issuance and used at least 75 percent of the loan for payroll.  On June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 went into effect.  This law extended the period from eight weeks to 24 weeks that the loan proceeds had to be spent and reduced the requirement that the loan proceeds be spent on payroll from 75 percent to 60 percent.

If convicted, Brooks faces a maximum sentence of 20 years in federal prison for wire fraud and money laundering followed by three years of supervised release.  Actual sentences for federal crimes are typically less than the maximum penalties.  A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings. 

Acting United States Attorney Jonathan F. Lenzner commended the FDIC OIG, the IRS-CI, the FBI, and the SBA OIG for their work in the investigation.  Mr. Lenzner thanked Assistant U.S. Attorneys Sean R. Delaney, Jessica C. Collins, and Jennifer L. Wine, who are prosecuting the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md/community-outreach.

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