DETROIT, MI – On Tuesday, July 13th, 2021, Darrell Baker was sentenced to 24 months in federal prison on charges of bank fraud and money laundering arising out of a $590,000 Covid-19 fraud scheme.
Darrell Baker, 56-years-old, of Detroit, pleaded guilty in September, 2020 to one count of bank fraud arising from his effort to obtain some $590,000 by defrauding a Pennsylvania financial institution in the issuance of a “Paycheck Protection Program” (PPP) loan. Baker also pleaded guilty to one count of money laundering, the result of financial transactions he engaged in with the fraudulently obtained funds.
“Mr. Baker treated the PPP like his own personal bank account,” said Acting United States Attorney Saima Mohsin. “This defendant’s actions caused the diversion of essential funds earmarked for legitimate businesses suffering due to the COVID-19 pandemic for his own personal gain. We are committed to ensuring that anyone who takes advantage of the system will be prosecuted.”
“By illegally taking money from the Paycheck Protection Program, Mr. Baker harmed the owners and employees of small businesses struggling through the pandemic,” said Timothy Waters, Special Agent in Charge of the FBI in Detroit. “The FBI is committed to working with our law enforcement partners to investigate and hold accountable anyone taking advantage of a global pandemic to line their own pockets.”
Baker acknowledged in his plea agreement to applying for and obtaining a $590,000 PPP loan on behalf of a purported business that he owns, called “Motorcity Solar Energy, Inc.” The PPP is a program managed by the Small Business Administration (SBA) that provides loans to help businesses keep their workforces employed during the pandemic. The SBA forgives the loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The PPP loans are funded from participating banks, in this case Customers Bank in Pennsylvania.
Baker submitted paperwork with his loan application representing that Motorcity Solar Energy Inc. had 68 employees and, in 2019 paid wages, tips, and other compensation totaling $2.8 million. All of these representations were in fact false. Motor City Solar Energy had no employees, no payroll expenses of any kind, and was not an operational business. Baker submitted these false statements as part of a scheme to intentionally defraud Customers Bank.
Baker managed to withdraw approximately $172,000 of the $590,000 loan he obtained before Baker’s own financial institution froze the remainder, which was ultimately returned to Customer’s Bank. Baker used the funds he did obtain to purchase four cashier’s checks, and used the four checks to purchase two Cadillac Escalades, a Dodge Charger, and a Hummer. Mr. Baker was ordered to forfeit these vehicles. Baker was also ordered to pay a money judgment in the amount of $172,484.40, which represents the portion of the loan that Baker obtained before his fraud was uncovered and the balance of the loan frozen as well as pay restitution in the amount of $89,864.
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