Six Philadelphia-area people charged with over $1M in COVID fraud

In the first Indictment, defendants Johnson, Bundy, Cooper, Barnett, and Mitchell are each charged with four counts of mail fraud and one count of theft of government money in connection with a scheme to submit fraudulent PUA applications. As part of the scheme, those charged allegedly submitted (or caused to be submitted) nearly 100 fraudulent applications resulting in a loss to the government of nearly $1 million dollars. All of the applications submitted as part of this scheme listed Johnson's former address in Philadelphia as the mailing address for benefits. After the benefits were mailed to this address, those charged allegedly accessed either the checks or debit cards issued on the applications.

In addition to the PUA scheme, defendants Johnson, Barnett, and Mitchell are also each charged with three counts of theft of government money for allegedly submitting fraudulent Economic Injury Disaster Loan (EIDL) applications to the Small Business Administration for businesses which did not exist. As a result of these fraudulent application, Johnson allegedly received approximately $52,000 dollars from the SBA which she allegedly spent on personal items. Barnett and Mitchell also allegedly received emergency advances from the SBA which they spent on personal items.

In October 2022, when law enforcement agents from the United States Department of Labor -- Office of Inspector General, the Federal Bureau of Investigation, and the Department of Homeland Security Investigations arrested Bundy and Mitchell for the charges in this Indictment, firearms and ammunition were recovered from both of their residences. Immediately thereafter, Bundy and Mitchell were charged by Criminal Complaint with illegally possessing a firearm and ammunition as previously convicted felons.

In the second fraud Indictment announced today, defendant Edmonds is charged with three counts of mail fraud and three counts of theft of government money for allegedly submitting fraudulent PUA, EIDL, and Paycheck Protect Program ('PPP') applications. Edmonds is also charged with spending the EIDL and PPP funds on personal items.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act created the Pandemic Unemployment Assistance (PUA) program, which provides unemployment benefits to individuals not eligible for regular unemployment compensation or extended unemployment benefits, including individuals, families, and businesses affected by the COVID-19 pandemic. Eligibility to receive weekly PUA benefits is predicated on an applicant's unemployment for reasons related to the pandemic, and it requires that the applicant was able to work each day and, if offered a job, would have been able to accept it. Once an applicant is approved to receive benefits, the applicant is required to submit weekly certifications indicating that he or she: was ready, willing and able to work each day; was seeking full time employment; did not refuse any job offers or referrals; and had reported any employment during the week and the gross pay or other payments received.

"Pandemic Unemployment Assistance and small business loan funds are intended to help working Americans and small business owners continue to pay their bills and make ends meet, even when revenues have dropped dramatically due to the pandemic," said U.S. Attorney Romero. "Thieves who attempt to take these funds under false pretenses are taking advantage of others' misfortune -- ripping them off while also ripping off all taxpayers who fund the programs. These defendants allegedly obtained over $1 million in funds that could have helped struggling businesses and individuals."

"White collar crime being conducted by convicted felons is part of the new criminal reality facing law enforcement agencies. These criminals are intelligent and bold enough to deliberately defraud the United States government on a large scale," said William S. Walker, Special Agent in Charge of HSI's Philadelphia office. "Combatting these criminals takes an immense amount of time, effort, and cooperation between the prosecutors and the investigating agencies. We are extremely proud of the working relationships that have developed between all agencies involved."

"The amount of pandemic program fraud uncovered in the last two-plus years is utterly offensive," said Jacqueline Maguire, Special Agent in Charge of the FBI's Philadelphia Division. "This was emergency financial assistance meant to keep families, businesses, and the economy afloat, not a golden ticket for crooks and opportunists to live the high life. As these mounting indictments show, the FBI continues to investigate those who so eagerly defrauded the government and we're committed to holding each and every one accountable for their crimes."

"An important part of the mission of the Office of Inspector General is to investigate allegations of fraud related to unemployment insurance programs. We will continue to work with the Pennsylvania Department of Labor and Industry and our law enforcement partners to investigate these types of allegations", stated Syreeta Scott, Special Agent-in-Charge of the Philadelphia Region, U.S. Department of Labor Office of Inspector General.

This case was investigated by the United States Department of Labor -- Office of Inspector General, the Federal Bureau of Investigation, and the Department of Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorneys Everett Witherell and Timothy Lanni.

Contact:

UNITED STATES ATTORNEY'S OFFICE EASTERN DISTRICT OF PENNSYLVANIA 615 Chestnut Street, Suite 1250 Philadelphia, PA 19106 JENNIFER CRANDALL Media Contact 215-861-8300 Follow @USAO_EDPA on Twitter to get the most up-to-date information about big cases and community news.

Updated October 25, 2022