Nineteen individuals have been named in a federal indictment charging them with violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today. The indictment, returned by a federal grand jury on May 12, 2022, charges the defendants with conspiracy to commit wire fraud.
The following 18 defendants have either been arrested or summoned for appearance before a federal magistrate judge:
Michael Lewayne Hill, a/k/a Tank, 47, of Mineral Wells;Andrew Charles Moran, 43, of Lewisville;Peter Keovongphet, a/k/a Lil’ Pete, 34, of Ft. Lauderdale, FL;Ty Alan Burkhart, 34, of Frisco;Jason Lawrence Geiger, a/k/a Austin St. John a/k/a the Red Power Ranger, 47, of McKinney;Eric Reed Marascio, a/k/a Phoenix Marcon, 50, of Allen;Christopher Lee McElfresh, 43, of Frisco;Cord Dean Newman, 44, of Homosassa, FL;Elmer Omar Ayala, 45, of Midlothian;Gregory Fitzgerald Hatley, Jr., 38, of Allen;Alexander Eric Cortesano, 52, of Dallas;Arthur Atik Pongtaratik, 33, of Carrollton;Miles Justin Urias, 34, of Richardson;Fabian C. Hernandez, 44, of Lake Alfred, FL;Daniel Lee Warren, 33, address unknown;Rajaa Bensellam, 49, of Allen;Hadi Mohammed Taffal, 50, of Allen; andJonathon James Spencer, a/k/a Spence, 33, of Rowlett.
According to the indictment, the defendants, led by Michael Hill and Andrew Moran, are alleged to have executed a scheme to defraud lenders and the Small Business Administration’s (SBA’s) Paycheck Protection Program (PPP). Hill is alleged to have recruited co-conspirators to use an existing business or create a business to submit applications to obtain PPP funding. Once enlisted, Moran is alleged to have assisted his co-conspirators with the application paperwork, including fabricating supporting documentation and submitting the application through the online portals. On the applications, the defendants are alleged to have misrepresented material information such as the true nature of their business, the number of employees, and the amount of payroll. Based on these material misrepresentations, the SBA and other financial institutions approved and issued loans to the defendants. Once in receipt of the fraudulently obtained funds, the defendants did not use the money as intended, such as to pay employee salaries, cover fixed debt or utility payments, or continue health care benefits for employees. Instead, the defendants typically paid Hill and Moran, transferred money to their personal accounts, and spent the funds on various personal purchases. In other instances, the defendants sent the fraudulently obtained funds to Jonathon Spencer for purported investment in foreign exchange markets. In total, the defendants are alleged to have fraudulently obtained at least 16 loans and at least $3.5 million.If convicted, the defendants each face up to 20 years in federal prison.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.The PPP allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities.
The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within eight weeks of receipt and use at least 75 percent of the forgiven amount for payroll. This case is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigations. This case is being prosecuted by Assistant U.S. Attorneys in the Eastern District of Texas.