Texas Couple Pleads Guilty to Orchestrating an Extensive Multi-Million COVID-19 Fraud Scheme in North Carolina

RALEIGH, N.C. – Edward Whitaker, 55, and Schunda Coleman, 50, pleaded guilty today to conspiracy to commit money laundering for their role in helping dozens of North Carolina residents fraudulently obtain Paycheck Protection Act (“PPP”) COVID-19 loans.

“This couple orchestrated a vast scheme to steal taxpayer money meant to help small businesses weather a global pandemic,” said U.S. Attorney Michael Easley. “Now, they are facing up to 20 years in federal prison. We are vigorously pursuing criminals who ripped off public programs for profit while the pandemic crippled local businesses.”

The married couple from Edinburg, TX, operated a nation-wide scheme to help people across the country commit PPP fraud.  According to the criminal complaint and information summarized in court, Whitaker and Coleman created fraudulent supporting documents and applications for PPP loans, which they provided to individuals for a fee.  In addition to supplying the documents, the pair assisted “clients” in falsifying the number of employees and gross wages paid by a company prior to the COVID pandemic, in order to help them qualify for a PPP loan.  Whitaker would instruct these individuals on how to make it appear that the PPP loan was being paid out to employees, which in reality the money was transferred back to the client.  

According to the criminal information, Whitaker and Coleman collectively facilitated the fraudulent disbursement of more than $15 million in PPP and Economic Injury Disaster Loan Program (EIDL) loans.  To further promote the scheme, the couple utilized middlemen, who were in turn paid a fee, to recruit additional individuals to submit fraudulent loan applications.

Late last year, Quentin Jackson pled guilty in the same conspiracy for both utilizing Whitaker and Coleman to obtain his own fraudulent PPP loans, as well as for recruiting additional individuals in the Eastern District of North Carolina to use Whitaker and Coleman to obtain fraudulent PPP funds.  Jackson ultimately recruited over a dozen individuals to obtain fraudulent PPP loans through Whitaker and Coleman’s scheme.

“The PPP and EIDL programs did not create a limitless pot of money”, said Special Agent in Charge, Donald “Trey” Eakins, IRS Criminal Investigations, Charlotte Field Office. “Economic relief efforts were meant to assist those in most need who have been affected by the COVID-19 pandemic. Criminals think these funds are an easy target to take advantage of innocent people. Be assured that IRS Criminal Investigation, together with our law enforcement partners and the U.S Attorney’s Office, will hold those accountable who engage in similar behavior.”  

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to provide emergency financial assistance to the millions of Americans who were economically suffering from the COVID-19 pandemic.  The CARES Act and additional appropriations authorized up to $649 billion in forgivable loans to small businesses through the Paycheck Protection Program (PPP).  Financial institutions issued the PPP loans, which were guaranteed by the Small Business Administration (SBA).

Whitaker and Coleman both pleaded guilty to Conspiracy to Commit Money Laundering in violation of 18 U.S.C. § 1956(h) and face up to 20 years in prison and a potential fine.  

Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after United States Magistrate Judge Robert T. Numbers II accepted the plea.  Internal Revenue Service (IRS) Criminal Investigation is leading the investigation, and Assistant U.S. Attorneys David G. Beraka and Karen K. Haughton are prosecuting the case.

Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:22-cr-00257-D.