3 sentenced for $3.5 million COVID-19 Relief fraud scheme

BOISE, Idaho (KIFI) – Three defendants were sentenced Tuesday for fraudulently obtaining and misusing Paycheck Protection Program (PPP) loans that were issued by a Boise financial institution and that were guaranteed by the U.S. Small Business Administration under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, U.S. Attorney Josh Hurwit announced.

The defendants’ conduct was part of larger COVID-19 fraud ring.

59-year-old Khadijah X. Chapman of Atlanta, was sentenced to three years and 10 months in prison. 42-year-old Daniel C. Labrumof South Jordan, Utah, was sentenced to two years in prison. 58-year-old Eric J. O’Neil of Bethel, Connecticut, was sentenced to two years and three months in prison.

According to court documents and evidence presented at trial, Chapman, Labrum, and O’Neil fraudulently obtained PPP loans for fictitious businesses in 2020 and 2021. The defendants worked with co‑conspirators to falsify information and submitted fraudulent documents to financial institutions in Boise and elsewhere to collectively obtain approximately $3.5 million in relief funding intended for small businesses struggling with the economic impact of COVID-19.

Chapman was convicted after a jury trial in November 2023 of bank fraud. Labrum and O’Neil pleaded guilty in 2023 to bank fraud.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, Special Agent in Charge Thomas M. Fattorusso of IRS Criminal Investigation (IRS:CI) New York, Assistant Director Michael D. Nordwall of the FBI’s Criminal Investigative Division, Special Agent in Charge Matthew Miraglia of the FBI Buffalo Field Office, Inspector General Gail S. Ennis of the Social Security Administration Office of the Inspector General (SSA-OIG), Special Agent in Charge Sharon B. MacDermott of SSA-OIG, and Inspector in Charge Ketty Larco-Ward of the U.S. Postal Inspection Service (USPIS) Boston Division joined U.S. Attorney Hurwit in making the announcement.

IRS:CI, the FBI, SSA-OIG, and USPIS investigated the cases.

Trial Attorneys Jennifer Bilinkas and Tamara Livshiz of the Justice Department’s Criminal Division’s Fraud Section and Assistant U.S. Attorney Sean Mazorol for the District of Idaho prosecuted the cases.