A Pittsburgh credit counseling business owner and a Detroit accountant ripped off the Small Business Administration and private lenders of $14 million by preparing false COVID-relief loans for small businesses in both cities, according to a federal grand jury.
Virginia Humphries, 35, of Pittsburgh and Matthew Lloyd Parker Jr., 36, of Detroit are charged with fraud conspiracy and 10 counts of bank fraud following an investigation by the FBI and postal inspectors.
The grand jury handed up the indictment on June 20, and the case was unsealed Monday in U.S. District Court in Pittsburgh.
According to the charges, the pair conspired to prepare false loan applications for small businesses to get loans under the Paycheck Protection Program during the COVID-19 pandemic in 2020 and 2021.
The program was set up to help businesses cover payroll and expenses during the crisis, but it also attracted widespread fraud across the U.S. as criminals filed bogus information to get loans they otherwise would not have received.
Prosecutors said Humphries and Parker were among those criminals and pulled the largest pandemic-related fraud yet prosecuted in Pittsburgh.
They prepared 318 loan applications for small businesses for some $23 million from lenders. Of those, 226 were approved by the Small Business Administration for a total of $14.5 million. But, the grand jury said, the applications were full of fakeries to trick the lenders.
Humphries, who in online interviews calls herself an entrepreneur and real estate agent specializing in housing and “financial literacy,” referred 34 businesses in Pittsburgh to Parker, who secured loans for 13 of them. Parker earned $1.6 million in preparer fees for filing false loan information, the grand jury said. Humphries got $82,000 in referral fees, plus loans and gifts from Parker, the grand jury said.
Parker recruited business owners in Detroit for the scheme and befriended Humphries to do the same in Pittsburgh. As an accountant, Parker was able to make bogus bank statements and tax papers look real, the grand jury said, and showed Humphries how to do it.
The indictment lists two victim banks, Customers Bank and Cross River Bank, and about 10 borrowers who got loans with fraudulent information, all identified by initials only.
Federal agents arrested Humphries and Parker on June 23, and both were in U.S. custody.