Tennessee man sentenced in COVID relief fraud

Credit: U.S. Attorney’s Office – Northern District of Mississippi

A Memphis man was sentenced to 62 months imprisonment following his conviction for his role in a scheme to defraud the Small Business Administration (“SBA”) by submitting fraudulent loan applications to the SBA for over $11 million.

According to court documents, Norman Beckwood, 29, of Memphis, recruited individuals to submit fraudulent loan applications to the SBA. Beckwood and his co-conspirator, Lakeith Faulker, who was an employee of the SBA and used his position at the SBA to assist borrowers, helped submit over $11 million in fraudulent Economic Injury Disaster Loans (“EIDL”). In return for their assistance in the fraudulent loans, the borrowers paid Beckwood and Faulkner $2.3 million.

On Jan. 17, Beckwood entered a plea of guilty to one count of conspiracy to commit wire fraud. Today, U.S. District Judge Sharion Aycock sentenced Beckwood to serve 62 months imprisonment followed by five years of supervised release. In addition to prison time, Faulkner was ordered to pay $10,620,452.26 in restitution to the SBA. In connection with his guilty plea, Beckwood also forfeited $700,147.74, a 2018 Mercedes Benz C Class and a 2020 Mercedes Benz G63.

On Dec. 7, 2022, Faulkner entered a plea of guilty to one count of conspiracy to commit wire fraud.  On May 24, United States District Judge Debra M. Brown sentenced Faulkner to serve 62 months imprisonment followed by five years of supervised release. Faulkner was also ordered to pay $10,620,452.26 in restitution to the SBA.

Twenty-one individual borrowers have also been charged in connection with the same scheme. In the case of United States v. Raven L. Brown, et al, (Case No. 3:23CR23), eight individuals have changed their plea to guilty and been sentenced by United States Senior District Judge Glen H. Davidson, Raven L. Brown (24 months incarceration, 3 years supervised release, $1,802,800 in restitution); Gerald Pegues (12 months + 1 day incarceration, 5 years supervised release, $173,200 in restitution); Gregory Shields (12 months + 1 day incarceration, 5 years supervised release, $206,000 in restitution); Shunequa Shields (6 months incarceration, 5 years supervised release, $177,100 in restitution); Devin Booker (6 months incarceration, 5 years supervised release, $211,000 in restitution); Tommie L. Spencer, Jr. (6 months incarceration, 5 years supervised release, $250,600 in restitution); Adonis Golden (12 months + 1 day incarceration, 3 years supervised release, $199,900 in restitution); and Jemarious Fair (22 months incarceration, 5 years supervised release, $199,600 in restitution). A remaining defendant is currently set for trial on Feb. 12, 2024.

“Norman Beckwood and his cohorts stole millions of dollars from American taxpayers while taking advantage of programs designed to help keep businesses afloat during a national crisis,” said U.S. Attorney Clay Joyner. “Our office will continue to work with our law enforcement partners to bring those who committed pandemic benefit fraud to justice and will use all available tools to recover the stolen funds.”

“Abusing SBA’s pandemic relief programs intended to provide critical relief to small businesses is unconscionable.” said SBA OIG’s Central Region Special Agent-in-Charge Brady Ipock. “This sentencing further showcases that OIG will relentlessly pursue fraudsters and bring them to justice. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to seeing justice served.”

This scheme was initially uncovered during a civil investigation, led by the Civil Division of the U.S. Attorney’s Office and Assistant U.S. Attorney J. Harland Webster.

Assistant U.S. Attorneys Clayton A. Dabbs, Parker King and Sam Wright of the Northern District of Mississippi are prosecuting the criminal case.

The case is being investigated by the Federal Bureau of Investigation, the U.S. Small Business Administration Office of Inspector General and the U.S. Treasury Inspector General for Tax Administration.