PLANO, Texas - Federal prosecutors in the Eastern District of Texas have announced several pandemic relief fraud cases involving more than $10 million in alleged or admitted losses as part of a nationwide enforcement effort targeting fraud in the Paycheck Protection Program and Economic Injury Disaster Loan program.
Three defendants have pleaded guilty and are awaiting sentencing, while two others are headed toward federal trials, according to the U.S. Attorney's Office.
The cases are part of a nationwide enforcement effort conducted from June 12 through Sept. 1 that involved more than 160 defendants and approximately $245 million in intended losses, federal officials said.
One of the largest Eastern District of Texas cases involves Weldon Greer Jr., 61, of Houston, who pleaded guilty Aug. 12 to conspiracy to commit wire fraud.
According to federal prosecutors, Greer participated in a conspiracy from 2020 through 2021 to obtain dozens of PPP and EIDL loans by submitting falsified supporting documents to the Small Business Administration.
The government said the resulting loss to the SBA was at least $8,394,561.
Greer faces up to 30 years in federal prison. His co-defendant, Jarrod Durant Wilburn, 58, of Houston, has also been charged and is scheduled for trial Oct. 13 in Beaumont. The allegations against Wilburn remain pending.
Another case involves Thomas Flanagan, 66, of Beaumont, who was indicted Aug. 13 on four counts of wire fraud.
Prosecutors allege Flanagan submitted falsified applications seeking forgiveness of PPP loans obtained for two businesses, James Flanagan Shipping Corporation and P.C. Pfeiffer Co. Inc.
The government alleges the fraudulent forgiveness applications resulted in a $1,514,917 loss to the SBA.
Flanagan faces up to 20 years in federal prison if convicted and is scheduled for trial in January 2027 in Beaumont. An indictment is an accusation, and Flanagan is presumed innocent unless proven guilty.
A separate case involves a Celina couple accused of using pandemic business loans for personal expenses.
Craig Bennett, 51, and Chemika Bennett, 53, pleaded guilty to conspiracy to commit wire fraud.
According to prosecutors, the Bennetts submitted online PPP loan applications under their own names and business names using fraudulent information. The applications represented that the money would pay business expenses and employee payroll.
Federal prosecutors said the Bennetts did not have the employees or business expenses claimed in the applications and instead used the loan proceeds for personal expenses.
The SBA's loss in their case totaled approximately $697,000.
Both face up to 20 years in federal prison. Their sentencing is scheduled for Nov. 10 in Sherman.
The Eastern District of Texas cases were announced as part of a broader federal initiative targeting suspected fraud involving pandemic-era SBA programs.
Nationwide, prosecutors said enforcement actions during the summer initiative involved more than 160 defendants and about $245 million in intended losses.
The SBA also reported suspending approximately 870,000 borrowers associated with $39 billion in suspected fraudulent PPP and COVID EIDL activity. A suspension or identification of suspected fraud does not by itself establish that a borrower committed a crime.
The PPP and COVID EIDL programs were established to provide financial assistance to businesses affected by the COVID-19 pandemic. The enforcement effort focuses on cases in which authorities contend applicants used false business information, fabricated payroll or revenue figures, stolen identities or other misrepresentations to obtain federal funds.
The Eastern District of Texas cases were investigated by the SBA Office of Inspector General and FBI.
