Former Baltimore City Council Candidate Convicted of Bank Fraud and False Statements in Connection With Scheme to Obtain Nearly $1.7 Million in Economic Injury Disaster Loans and Paycheck Protection Program Loans

BALTIMORE, Maryland, March 14 -- The office of the U.S. Attorney for the District of Maryland issued the following news release:

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Former Baltimore City Council Candidate Convicted of Bank Fraud and False Statements in Connection with Scheme to Obtain Nearly $1.7 Million in Economic Injury Disaster Loans and Paycheck Protection Program Loans

Henson used the fraudulently obtained funds for cosmetic surgery, extensive renovations to her home and the home of a family member, funding new business adventures--including a used car dealership that never opened--and a cryptocurrency she had created.

Baltimore, Maryland - After a one-week trial, a federal jury found Nichelle Henson, age 38, of Baltimore, Maryland, guilty of making false statements and for bank fraud in connection with fraudulent applications Henson filed to obtain Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans in the names of multiple purported businesses that she had previously incorporated in the state of Maryland.

The trial conviction was announced by United States Attorney for the District of Maryland Kelly O. Hayes; Special Agent in Charge William J. DelBagno of the Federal Bureau of Investigation, Baltimore Field Office; and Brian D. Miller, Special Inspector General for Pandemic Recovery (SIGPR).

According to the evidence presented at trial, Henson incorporated several businesses with the State of Maryland, including Crowns Construction, LLC; Nichelle Henson Campaign, LLC; One Stop for Services, LLC; Your Friendly Tax Preparation Services, LLC; Women Entrepreneurs Can Succeed, LLC, and Peace of Mind Services, Inc. The Defendant opened bank accounts in the names of some of her businesses and obtained Tax Identification Numbers (TINs) from the Internal Revenue Service (IRS) for the businesses.

In 2020 and 2021, she submitted six fraudulent EIDL applications to the SBA for her various businesses that contained false information concerning each business's gross receipts, costs of goods sold, and number of employees. At the time of the submissions, none of the businesses were operating, and none of the businesses had any employees. As a result of the applications, Henson received $18,000 in United States Treasury funds from the SBA.

Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and certain other expenses, through the PPP, administered through the Small Business Administration (SBA). The SBA also offered an EIDL and/or an EIDL advance to help businesses meet their financial obligations. An EIDL advance did not have to be repaid, and small businesses could receive an advance, even if they were not approved for an EIDL loan. The maximum advance amount was $10,000.

During this same period, Henson submitted 12 fraudulent PPP loan applications to three SBA-approved lenders for her various purported businesses. Each of these applications contained false information about each business's number of employees and average monthly payroll, and each was supported by purported IRS tax forms listing employees and wages that were, in fact, never filed with the IRS.

Between April 30, 2020 and June 29, 2020, Henson submitted six PPP applications for her various businesses. One of these businesses was called Nichelle Henson Campaign (the "Campaign"), an entity that was meant to fund Henson's run for Baltimore City Council. However, at the time of the submission of the application for the Campaign on May 10, 2020, Henson had withdrawn her candidacy - approximately six months earlier, on November 19, 2019.

Another entity was called Crowns Construction, a purported construction business located in Baltimore City. This business did not exist in any capacity, and the address used on the PPP loan application was nothing more than a vacant lot. In support of the application for this business, Henson included a fabricated Baltimore Gas & Electric that purported to be for Crowns Construction but was in fact a bill belonging to a neighbor of Henson's that she had scanned and then doctored using a PDF editing tool.

Henson ultimately obtained $998,590 as a result of these six fraudulent applications. On January 19, 2021, Henson submitted six more fraudulent PPP loan applications--this time to M&T Bank--for each of her six purported businesses. Each of these applications contained lies about the existence of each business, the number of their employees, and payroll paid. And each application was supported by fabricated tax documents never filed with the IRS. M&T funded five of the six loans, transferring $676,250 in PPP funds to Henson. Shortly thereafter Henson went to an M&T branch in Baltimore and withdrew $5,000 cash from each of her five M&T accounts where the PPP funds flowed. M&T thereafter froze Henson's accounts and notified law enforcement about the suspected fraud.

Henson used the EIDL and PPP loan funds to support businesses other than the borrowers, such as Wyse Rides, a used car business Henson attempted to open in Dundalk, Maryland. The business never opened. Henson used the PPP funds she received in multiple ways impermissible under the PPP, including for cosmetic surgery, for extensive renovations to her home and a family member's home, to pay a year's rent for her personal home, to pay a year's rent for a new business venture, and to fund other new business ventures, including a used car dealership--which never opened--and to create a cryptocurrency called Subina Coin and, relatedly, to fund an entity called the "Adageyhdi Indian Nation."

In total, Henson obtained $1,694,451 in connection with her scheme to defraud.

Henson faces a maximum possible sentence of 30 years in federal prison for each count of Bank Fraud, and a maximum possible sentence of 5 years in prison for each count of False Statements. U.S. District Judge Matthew J. Maddox has scheduled sentencing for August 5, 2025 at 10:00 a.m. She will be required to pay restitution to the SBA and the victim financial institutions.

The District of Maryland Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. The CARES Act was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.

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.

United States Attorney Kelly O. Hayes commended the FBI and the Office of the Special Inspector General for Pandemic Recovery, which conducted the investigation on behalf of the Pandemic Response Accountability Committee (PRAC) Fraud Task Force, for their work in the investigation. Ms. Hayes thanked Assistant U.S. Attorneys Paul Riley and Joseph Wenner, who are prosecuting the federal case, and Paralegal Specialist Julie Jarman.

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

Contact

Angelina Thompson

[email protected]

(301) 344-4338

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Original text here: https://www.justice.gov/usao-md/pr/former-baltimore-city-council-candidate-convicted-bank-fraud-and-false-statements