Two south suburban women and a man are charged in federal court with working as illegal brokers for people who stole hundreds of thousands of dollars from the Paycheck Protection Program.
Amanda Heller of Frankfort, Sarah Stokes of Crestwood and James Townsend of Midlothian were indicted on wire fraud charges. They’re free in lieu of bail. Heller declined to comment except to say, “It’s a charge at this time, not a conviction.” Stokes and Townsend couldn’t be reached.
Heller, Stokes and Townsend had filed applications for dozens of loans on behalf of sole proprietors of businesses that didn’t actually exist, according to an indictment unsealed last month and applications for search warrants unsealed Monday.
The trio got kickbacks of $5,000 to $10,000 for each successful application to the program, which began in early April 2020 and ended in late May 2021, according to the indictment.
“The defendants did not ask the applicants to tell them the name of their occupation, the amount of income they earned or the amount of business expenses they incurred because the defendants knew at the time that they agreed to prepare the recruited applicants’ loan applications that they would falsely represent the applicants’ occupation, income and expenses in those applications,” the indictment said.
Stokes and Townsend also got loans for themselves, according to the indictment, which didn’t say how many people got fraudulent PPP loans, what their total value was or whether the people who got them are facing criminal charges, too.
Heller allegedly submitted two phony PPP applications on behalf of a man who later told the FBI about it, according to court records. The man claimed he’d paid Heller $10,000 in kickbacks for arranging $38,846 in shady loans.
The man then persuaded a relative to work for the FBI as an informant.
The informant contacted Heller to ask her to set up a fraudulent PPP loan, according to court records. Heller got suspicious of the informant but kept talking to him, the records show.
Heller told the informant she wouldn’t arrange any loans for more than $40,000 and that, according to one of her text messages, she’d “charge 10 off of it,” the FBI said.
Heller was trying to avoid suspicion by keeping the loan amounts relatively low, according to the FBI.
The “10” referred to a $10,000 kickback she expected to get from a loan, the FBI said in its applications asking a judge for permission to search Heller’s home and workplace.
Heller didn’t get a loan for the informant before the PPP program expired in May 2021, according to the FBI.
The informant is charged in federal court with smuggling untaxed cigarettes and hoped his cooperation with the FBI would be brought to the attention of the judge handling his case.
Criminal cases against people accused of acting as illegal PPP brokers are relatively rare. One of the more notable cases involved three California tax preparers accused of causing $40 million in losses to the United States. They got 30% kickbacks from the fraudulent loans they’d arranged.
Fraud has been found to be rampant in the PPP program that was created under then-President Donald Trump in 2020 and continued by former President Joe Biden, with at least $200 billion believed to have been scammed by phony loan applications to the $814 billion program.
In April 2024, a Justice Department report said more than 3,500 people had been charged with stealing federal pandemic relief money, including PPP loans. Most of the loans were forgiven, meaning they didn’t have to be repaid as long as the borrower showed they were used for business purposes, including payroll.
The DOJ report said more than $1.4 billion in ill-gotten funds had been recovered.