Reginald Alphonso Hopkins, age 52, of Prince George’s County, Maryland, pleaded guilty today to the charge of conspiracy to commit wire fraud relating to the submission of fraudulent claims for the Paycheck Protection Program (“PPP”) benefits under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, enacted to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic.
The guilty plea was announced by Erek L. Barron, United States Attorney for the District of Maryland and Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office.
According to his plea agreement, Hopkins fraudulently obtained $1,007,224 in fraudulent PPP funds and $9,000 in Economic Injury Disaster Loan funds for various purported businesses he controlled—a transportation business, a car sales business, and an assisted living facility. He also attempted to fraudulently obtain more than $3,132,224 in PPP and EIDL funds.
According to his plea agreement, on June 11, 2020, with direction from Hopkins, a co-conspirator submitted a fraudulent PPP loan application to Bluevine and Celtic Bank for Prestige Executive Transportation, a business owned by Hopkins. The application contained multiple material misrepresentations, including that Prestige Executive Transportation in 2019 had 15 employees and an average monthly payroll of $116,436.
In support of the loan application, a fabricated 2019 Internal Revenue Service (IRS) Form 944—Employer’s Annual Federal Tax Return—was submitted, which falsely indicated that the entity’s total payments to all employees in 2019 was $1,397,237.78. Based on the fraudulent submissions, the PPP loan was funded, and approximately $291,090 was distributed. Hopkins agreed to pay the co-conspirator a kickback payment after the PPP loan funds were received, and he provided the co-conspirator a check in the amount $58,000.
On March 14, 2021, the co-conspirator submitted a fraudulent PPP loan application to Cross River Bank for Prestige 24/7 Auto Sales & Services LLC (“Prestige 24/7”), another business owned by Hopkins. The loan application contained multiple material misrepresentations, including that Prestige 24/7 in 2019 had 15 employees and an average monthly payroll of $120,409. In support of the loan application, a fabricated 2019 IRS Form 940—Employer’s Annual Federal Unemployment—was submitted, which falsely indicated that the entity’s total payments to all employees in 2019 was $1,444,902.60. Based on the fraudulent submissions made on behalf of Hopkins as the owner of Prestige 24/7, the PPP loan was funded on March 23, 2021, and approximately $294,771 was disbursed to Hopkins.
On March 23, 2021, the co-conspirator, with direction from Hopkins, submitted a fraudulent PPP loan application to Cross River Bank for Prestige Assisted Living Inc. (“Prestige Assisted Living”), another business owned by Hopkins. The PPP loan application contained multiple material misrepresentations, including that Prestige Assisted Living in 2019 had 24 employees and an average monthly payroll of $168,545.
In support of the loan application, a fabricated 2019 IRS Form 940 was submitted, which falsely indicated that the entity in 2019 paid $2,022,544.12 in wages to all employees. Prestige Assisted Living did not even obtain a license to operate as an assisted living facility until December 18, 2020. It was authorized to have four beds. Moreover, even after it obtained its license, Prestige Assisted Living never paid wages to any employee.
The PPP loan application also included a fabricated February 2020 Wells Fargo Bank account statement for Prestige Assisted Living. The actual beginning balance on the Wells Fargo Bank statement was negative $3.50, not $123,538.50 as shown on the purported bank statement submitted to Cross River Bank. Likewise, the actual ending balance on the Wells Fargo Bank statement was negative $17.50, not $123,475.77 as shown on the purported February 2020 statement submitted to Cross River Bank. Based on the fraudulent submissions the PPP loan was funded, and approximately $421,363 was distributed to Hopkins. Hopkins again paid the co-conspirator kickback payments for his work, totaling $44,000.
Hopkins spent the fraudulently obtained loan proceeds in various ways, including by paying $177,000 in kickbacks to the co-conspirator, providing PPP funds to various friends, family members and associates for purposes unrelated to employment, making large cash withdrawals for himself, and paying off various personal debts.
Hopkins also used $30,000 of the PPP funds to purchase an auto body repair shop called B&G Auto Repair LLC. He planned to seek and obtain a fraudulent PPP loan for this entity as well.
On March 19, 2021, another fraudulent PPP loan application was submitted to Cross River Bank for Prestige Executive Protection Services, LLC, another business owned by Hopkins, seeking a loan in the amount of $250,723. This application falsely claimed, among other things, that the business had $100,289 in average monthly payroll. It also included a fabricated 2019 IRS Form 940, which stated that total payments to all employees in 2019 were $1,203,471.52. The loan was ultimately declined.
In addition to obtaining the PPP loans discussed above, Hopkins also conspired with the co-conspirator to obtain PPP loans for various other purported businesses, including Prestige Paradise Promotions, LLC, Prestige Executive Protection Services II, LLC, Prestige Real Estate & Development, LLC, and B&G Auto Repair LLC, as noted above. Hopkins repeatedly sought the co-conspirator’s assistance in obtaining PPP loans for these entities, but the loans never closed.
Hopkins also caused to be submitted numerous fraudulent EIDL applications. The EIDL program was another program administered by the U.S. Small Business Administration (“SBA”) designed to provide relief funds to small businesses impacted by COVID-19.
On April 1, 2020, an EIDL application was submitted for Prestige Executive Transportation. The application falsely claimed that the business had five employees, 2019 gross revenues of $250 million, and cost of goods sold of $100 million. This equated to a requested loan amount of $2 million. This loan was ultimately declined; however, Hopkins received a EIDL Advance of $5,000.
Likewise, on April 2, 2020, an EIDL application for Prestige Executive Protection Services II was submitted to the SBA. Financial information supplied on the application stated that Prestige Executive Protection had gross revenues of $200,000 and a monthly revenue of $16,666.66, which equated to a requested loan amount of $100,000. This loan was also declined; however, Hopkins received an EIDL Advance of $4,000.
On July 1, 2020, an EIDL application was submitted for Prestige 24/7. It falsely claimed that the business had gross revenues of $700,000 and cost of goods sold of $650,000. The loan was ultimately declined.
If the party’s plea agreement is accepted by the Court, Hopkins will be sentenced to between 18 months and 41 months of imprisonment. U.S. District Judge Richard D. Bennett has scheduled sentencing for January 10, 2024, at 2:30 p.m.
The District of Maryland Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.
United States Attorney Erek L. Barron commended the FBI for their work in the investigation and thanked the Baltimore County Police Department and the U.S. Small Business Administration – Office of Inspector General (“SBA-OIG”). Mr. Barron thanked Assistant U.S. Attorney Paul Riley, who is prosecuting the federal case. Mr. Barron also recognized the assistance of the Maryland COVID-19 Strike Force Paralegal Specialist Joanna Huber.
