(The Center Square) – Two cases of federal pandemic loan fraud involving approximately $635,000 were announced by the U.S. Attorney’s Office in the Eastern District of Missouri.
Two people from the St. Louis area were indicted and accused of fraudulently obtaining approximately $500,000 in pandemic business loans. In a separate case, a man from University City admitted fraudulently obtaining a $135,000 pandemic loan and defrauding Missouri’s Medicaid program.
Pamela Hubbard of St. Louis and Irwin Coats of Florissant were each indicted by a federal grand jury on one count of conspiracy to commit wire fraud. They pleaded not guilty in court on Tuesday.
In the early stages of the COVID-19 pandemic, Hubbard, 45, and Coats, 43, developed a scheme to fraudulently obtain Paycheck Protection Program loans, according to the indictment. The PPP program was intended to help struggling small businesses during the pandemic shutdowns.
The two planned to use the money to open a “Wing Strip” in Florissant, according to the indictment. In May 2020, Coats applied for a $53,125 loan in the name of Abounding Protection LLC, a company he set up in 2007. Coats falsely claimed the company had 12 employees and an average monthly payroll of $21,250. In March 2021, coats submitted an application and received another loan for $24,166. The indictment stated Coats’ company had no employees, wages, company operations or revenue.
In June 2020, Hubbard submitted a PPP loan application for Star Shyne LLC, a company she setup in 2019. Hubbard made false claims about employees, payroll and submitted fake business, tax and lease documents and an altered check to enhance her claim. She eventually received $371,245.
The indictment stated Hubbard and Coats used the money to construct the restaurant and for improvements at a condominium in Florissant. In addition to seeking the forfeiture of any assets linked to the fraud, including money from the sale of the condominium, the conspiracy charge carries a penalty of up to 20 years in prison, a $250,000 fine or both.
Deandre Horne, 32, also pleaded guilty to one count of health care fraud and one count of wire fraud on Tuesday. Between July 2017 and March 2021, Horne fraudulently billed Missouri Medicaid for services by his company, Serenity Home Health Care CDS. Horne couldn’t support billing with valid timesheets or electronic visit verification documents. Horne also created false documentation to support bills.
Horne also admitted to falsely claiming to be the personal care attendant for multiple Missouri Medicaid beneficiaries. He billed for times when he was traveling throughout the country or to foreign locations.
Prosecutors argue the Missouri Medicaid program lost between $550,000 and $1.5 million due to Horne’s fraud.
Horne also applied for a PPP loan in July 2020 and received $135,707. He falsely claimed to be the sole owner of Budget Towing & Recovery LLC. He inflated the number of employees and falsely claimed a $40,000 monthly payroll.
Horne is scheduled to be sentenced on May 22. The health care fraud charges carry a potential penalty of up to 10 years in prison, a $250,000 fine or both. Wire fraud charges carry a penalty of up to 20 years in prison, a $250,000 fine or both.
