A previous resident of Columbus has confessed to manipulating and illegally obtaining over a million dollars through deceptive applications for [federal loans meant for COVID-19 business relief](https://data.dispatch.com/paycheck-protection-program-loans/).
James P. Dawson, aged 40, proclaimed his guilt on Tuesday in the U.S. District Court in Columbus for committing wire fraud and falsifying statements regarding the five Paycheck Protection Program (PPP) loan applications and four Economic Injury Disaster loans (EIDL) he applied for.
Dawson is now living in Orlando, Florida, formerly of Northeast Columbus near New Albany.
Court documents reveal that between April and October 2020, Dawson submitted fraudulent applications to procure PPP loans, out of which two were approved and delivered the undisclosed amount.
Also, he made four deceptive applications for acquiring EIDL loans. None of them were disbursed as loans per se, but for three of them, he derived unsecured advances. The total attempted fraud amounts to over $1.1 million, and lenders paid out more than $200,000 as a result.
Incorrect information provided by Dawson in his PPP applications involved the operations of the businesses he was associated with, his monthly payroll costs, and the actual number of his employees.
One such business he was linked with was Stadium Bar LLC, in Gahanna’s Creekside development. Despite Dawson’s false claim that the bar was functioning on Feb. 15, 2020, the federal prosecutors establish that its occupancy certificate was issued on March 20th, it got its liquor license on May 26th, and Dawson admitted it started on June 20th, 2020, during an interview with law enforcement.
Later, Stadium Bar filed for voluntary bankruptcy under Chapter 11 in 2022, and finally shut its doors.
The CARES Act established the PPP to offer forgivable loans to small businesses to manage overhead costs and keep them afloat during the COVID-19 pandemic. However, borrowers were obliged to provide accurate information about their businesses. All PPP loans were entirely protected by the U.S. Small Business Administration.
Rigged relief applications could lead to severe sentences. Pending an investigation report, Dawson could be facing up to 20 years of imprisonment and a fine of $250,000 for the wire fraud charge. The false statement claim bears a maximum penalty of 5 years in jail and a fine of up to $250,000.
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Frequently Asked Questions
What is the Paycheck Protection Program (PPP)?
The PPP was established by the CARES Act to provide qualifying small businesses with forgivable loans to cover payroll costs, rent, utility bills, mortgage interests and other specific expenses. The loan amount depended partly on the average monthly payroll cost of the business. It was entirely forgivable if utilized for specified purposes.
What is the Economic Injury Disaster Loan (EIDL)?
EIDL is a funding relief program extended by the CARES Act, which provides qualifying small businesses with loans to help pay fixed debts, payroll, accounts payable and other bills that would have been paid if the pandemic hadn’t occurred. The SBA also provided an EIDL Advance that was meant to offer emergency economic relief to businesses enduring a temporary loss of revenue. The EIDL Advance was regarded as a grant and did not have to be repaid.
What are the potential consequences for PPP or EIDL fraud?
Fraudulent activity related to PPP or EIDL could lead to severe penalties. For wire fraud, one can be sentenced to up to 20 years in prison and fined up to $250,000. Falsifying a statement could result in imprisonment up to 5 years and a fine of up to $250,000.
