A former Philadelphia man is accused of stealing nearly $1 million in loans meant to help small businesses survive the pandemic, spending the funds on diamond rings, a new car, and a Florida home, according to federal prosecutors.
Devron Brown, 50, fraudulently received $937,500 in June 2020 through the Paycheck Protection Program (PPP), the federal program of forgivable business loans, the U.S. Attorney’s Office for the Eastern District of Pennsylvania contends. Brown was arrested and charged with two counts of bank fraud and nine counts of money laundering.
In an email, Brown said his lawyer could not respond by The Inquirer’s deadline for publication. He did not answer a follow-up email asking whether he could comment by a later deadline.
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Earlier this month, the U.S Justice Department said it had prosecuted more than 100 defendants in more than 70 criminal cases related to PPP fraud. The department had recovered more than $65 million in cash from fraudulently obtained PPP funds, as well as real estate properties and luxury items purchased with such proceeds.
That’s a tiny fraction of the 11.8 million approved loans totaling nearly $800 billion under the program as of May 31, according to the Small Business Administration. The 1% interest loans are meant to cover payroll costs, interest on mortgages, rent, or utilities. The loans can be forgiven if firms spend the proceeds on these expenses within a set time period and use a certain percentage on payroll.
Brown, whose last known address is in Florida, was the president and owner of the construction business Just Us Construction Inc., which had a Philadelphia business license that expired in 2018, according to an indictment filed this month. The indictment said a PPP application for the company contained false information about the number of employees, wages paid to them, and payroll taxes. For example, the application said the company paid payroll taxes for 25 Pennsylvania workers, but it paid no payroll taxes for employees in the state during that period, the indictment said.
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Brown also certified that the money would be used to retain workers and cover business costs, according to the indictment. Instead, prosecutors allege, Brown went on an epic spending spree, buying a residential property in Florida ($250,000), a Lexus GS 350 ($42,785), and two 14-karat white gold diamond rings ($6,318). The indictment says he also bought a pickup truck, a motorcycle, and an excavator.
“Thieves who attempt to take these funds are taking advantage of others’ misfortune — ripping them off while also ripping off all taxpayers who fund the program,” Acting U.S. Attorney Jennifer Arbittier Williams said in a statement. “As alleged, Brown fraudulently obtained nearly $1 million in funds that could have helped struggling businesses and individuals.”
Brown allegedly tried to get more PPP money. Authorities claimed he was responsible for a second fraudulent loan application for roughly the same amount of money in early 2021. That application was denied.