Six arrested in alleged multimillion dollar scheme to defraud COVID funds

Tribune Content Agency

Six people were arrested this week and charged with wire fraud and money laundering for an allegedly yearslong scheme to bilk the federal government out of millions of dollars of COVID-19 aid intended for rental assistance, small businesses and the unemployed, federal prosecutors announced Wednesday.

U.S. Attorney Nick Brown, Western District of Washington, called the case “shocking” in scale. The six people are alleged to have filed hundreds of phony applications for government aid, seeking more than $6.8 million in government funds and ultimately receiving more than $3.3 million.

They used the money for luxury cars, vacations, designer clothes, jewelry and plastic surgery, prosecutors allege.

“All the people charged were relentless in defrauding nearly every form of assistance that government was providing during the height of the national crisis,” Brown said.

The bulk of the alleged fraud was in King County, Washington, and focused on federal emergency rental assistance funds available through much of the pandemic to prevent evictions. Prosecutors also allege the scheme targeted the Paycheck Protection Program and the Economic Injury Disaster Loan, programs that helped businesses stay afloat when the economy shut down, and unemployment benefits in several states.

The indictment alleges the defendants submitted more than 125 phony applications for various pandemic relief funds.

The alleged leader of the scheme was Paradise Williams, 29, of Phoenix, who prosecutors say created fake documents and told her friends how to pose as landlords and tenants needing rental assistance. Williams is charged with 19 counts of wire fraud and two counts of money laundering.

According to a detention memo filed by prosecutors Wednesday, Williams has been arrested over 20 times in multiple states for “repeated and increasingly sophisticated fraud and theft offenses.” She is, according to the memo, associated with at least two Social Security numbers and at least six known aliases.

Also charged were Rayvon Darnell Peterson, 32, of Seattle, with three counts of wire fraud and one count of money laundering; Tia Janee Rovinson, 28, of Fife, Washington, with three counts of wire fraud and one count of money laundering; Jahari Asad Cunningham, 45, of Houston, with three counts of wire fraud and one count of money laundering; D’arius Akim Jackson, 37, of Bonney Lake, Washington, with five counts of wire fraud and one count of money laundering; and David Jesus Martinez, 32, of Pacific, Washington, with three counts of wire fraud and one count of money laundering.

Martinez, Peterson and Jackson all pleaded not guilty on Tuesday. The other three defendants do not appear to have had initial court appearances and arraignments yet. Martinez’s lawyer did not immediately respond to a request for comment Wednesday. Lawyers for Jackson and Peterson declined to comment.

Wire fraud in connection with a declared major disaster, such as the COVID-19 pandemic, is punishable by up to 30 years in prison. Money laundering is punishable by up to 20 years in prison.

For nearly two years, beginning just a few weeks after COVID-19 was declared a worldwide pandemic, the defendants worked to defraud governmental programs out of aid money, the indictment alleges.

They did so by submitting false applications and documents to government agencies and financial institutions, the indictment says.

They posed fraudulently as landlords to obtain rental assistance, creating multiple phone numbers and email accounts. They used fake rental agreements and ledgers to support the applications and impersonated fictitious tenants and landlords, the indictment reads.

Williams allegedly received kickbacks for applications she submitted using the fictitious identities of other defendants.

“I just gave this place your number. Your my landlord lol. Behind 6 months,” Williams wrote in a text message included in the indictment. “I’ll give you 3k lol.”

“I need 5k minimum lol,” Martinez responded.

“This is your email,” Williams wrote. “Use that one.”

“Oh ok coo,” Martinez responded.

When rental assistance funds started running low in January 2022, program staffers began prioritizing applications from tenants who had received eviction notices. In response, Cunningham represented that he’d evicted fake tenants, hoping to expedite his application, the indictment says.

In total, the defendants submitted more than 78 emergency rental assistance applications, seeking more than $2.8 million and collecting more than $2.7 million, according to the indictment.

Williams used rental assistance funds to buy a 2018 Range Rover and a 2017 Lexus, the indictment says.

“These funds were intended to assist individuals and businesses who were impacted by the economic downfall of the pandemic,” Brown said. “And the idea that people were stealing money intended to keep people in their homes is very troubling.”