MIL-OSI Security: Baltimore County Man and Woman Plead Guilty to Fraudulently Obtaining More Than $300,000 in COVID-19 CARES Act Loans

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Source: Federal Bureau of Investigation (FBI) State Crime Alerts (b)

Baltimore, Maryland – Theodore Mouzon, age 42, of Pikesville, Maryland pleaded guilty today to conspiracy to commit wire fraud, relating to the submission of fraudulent CARES Act loan applications.  Co-defendant Yannice Nunez, age 34, of Baltimore County, Maryland, pleaded guilty to the same charge on January 4, 2024.  The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was a federal law enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic. 

The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Special Agent in Charge R. Joseph Rothrock of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Amaleka McCall-Brathwaite of the Small Business Administration Office of Inspector General, Eastern Region; and Chief Robert McCullough of the Baltimore County Police Department.

Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and certain other expenses, through the Paycheck Protection Program, administered through the Small Business Administration (SBA).  The SBA also offered an Economic Injury Disaster Loan (EIDL) and/or an EIDL advance to help businesses meet their financial obligations.  An EIDL advance did not have to be repaid, and small businesses could receive an advance, even if they were not approved for an EIDL loan. The maximum advance amount was $10,000.

According to their plea agreements and other court documents, Nunez and Mouzon submitted fraudulent PPP loan applications for purported businesses which they owned.  The applications contained material misrepresentations as to the existence of the business, number of employees and average monthly payroll.  Based on the fraudulent submissions and misrepresentations, Mouzon and Nunez ultimately obtained $300,162 in connection with their scheme (with $185,416 in loan funds going to Nunez and $114,746 in loan funds going to Mouzon).  Nunez and Mouzon further attempted to obtain more than $373,054 in PPP and EIDL funds for various other purported businesses, but those loans ultimately did not close. 

Nunez used the fraudulently obtained funds to, among other things, buy a motorcycle, purchase large amounts luxury goods, travel to Miami, Florida for vacation, and get plastic surgery.  Mouzon used the PPP funds for personal expenses and provided a portion of the funds to his girlfriend.  The defendants’ use of the funds for those purposes was impermissible under the PPP.

Nunez and Mouzon were arrested on November 14, 2022.  Law enforcement searched Mouzon’s residence, a house belonging to his girlfriend, that same day and recovered two loaded firearms—a .357 revolver and a .32 caliber revolver—multiple boxes of ammunition, and body armor.  Law enforcement interviewed Mouzon’s girlfriend who stated that there were no guns in the residence.  Law enforcement also located $4,945 in cash—proceeds from the scheme—next to a box containing 20 rounds of 9mm ammunition in a dresser in the bedroom.  As part of his plea agreement, Mouzon has agreed to waive any right, title and interest in the firearms, ammunition, and body armor.

Mouzon and Nunez each face a maximum sentence of 20 years in federal prison for wire fraud.   U.S. District Judge Ellen L. Hollander has scheduled sentencing for Nunez on March 27, 2024 at 10:00 a.m. and for Mouzon on April 5, 2024 at 11:00 a.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.  

For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.  Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

United States Attorney Erek L. Barron commended the FBI, Small Business Administration Office of Inspector General, and Baltimore County Police Department for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorney Paul A. Riley, who is prosecuting the case.  He also recognized the assistance of the Maryland COVID-19 Strike Force Paralegal Specialist Joanna B.N. Huber. 

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao/md.

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