LOUISVILLE, Ky. (WEVV) — Federal officials charged five people in Kentucky, Indiana and Colorado for their alleged roles in a scheme to fraudulently obtain about $1.6 million in COVID-19 relief funds. The arrests followed an indictment returned by a federal grand jury in Louisville on April 8.
The U.S. Attorney’s Office for the Western District of Kentucky said Kaelynn Greene, 31, and Camden Newton, 32, face charges including wire fraud, conspiracy to commit wire fraud, aggravated identity theft and money laundering. Betty Walker, also known as Betty Bailey, 39, Breanna Patterson, 32, and Jordan Greene, 34, are also charged with conspiracy to commit wire fraud.
According to the indictment, Kaelynn Greene and Newton allegedly carried out a scheme over more than two years to fraudulently obtain Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans. Prosecutors say they submitted false information on applications using their own names, created entities or stolen identities. Greene also allegedly worked with Walker, Patterson, Jordan Greene and others to recruit ineligible borrowers to submit fraudulent PPP applications.
Investigators say the group falsely claimed applicants operated businesses that did not exist or exaggerated limited business activity. They also allegedly created fake tax forms to support the applications.
As a result, authorities say the group secured more than $850,000 in fraudulent funds and attempted to obtain an additional $750,000 that was ultimately denied. Prosecutors said Greene also received kickbacks from borrowers.
The indictment states the group filed more than 20 EIDL applications and over 50 PPP applications on behalf of ineligible individuals.
Officials say the scheme targeted federal relief programs established under the Coronavirus Aid, Relief and Economic Security (CARES) Act to support small businesses during the pandemic. The programs were administered by the Small Business Administration.
“As part of the Department of Justice’s new National Fraud Enforcement Division, this indictment begins the process of holding five fraudsters accountable for their theft of hard-earned taxpayer dollars,” U.S. Attorney Kyle G. Bumgarner said. “These defendants allegedly took advantage of two federally funded programs designed to carry our country and its small businesses through unprecedented economic uncertainty by lying, cheating, and stealing. Their conduct will not be tolerated, and they will be aggressively prosecuted by this Office.”
Kaelynn Greene, Patterson and Walker have made their initial court appearances in U.S. District Court for the Western District of Kentucky. Court dates for Jordan Greene and Camden Newton have not yet been scheduled.
The Treasury Inspector General for Tax Administration is investigating the case, and Assistant U.S. Attorney Nicole Elver is prosecuting it.
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