Baltimore City Wire

On Tuesday, August 27, 2024, the Honorable Deborah L. Boardman sentenced Rudolph Brooks, age 48, of Cheltenham, Maryland, to 18 months in federal prison followed by two years of supervised release for fraudulently obtaining over $3.5 million in COVID-19 Coronavirus Aid, Relief, and Economic Security (CARES) Act Payroll Protection Program (PPP) loans. The court also ordered Brooks to forfeit all property and assets derived from his criminal activity, including a 2018 Tesla Model 3, property located in Upper Marlboro, Maryland, and at least $2,231,141.49 from 17 bank accounts controlled by Brooks.

The sentence was announced by Erek L. Barron, U.S. Attorney for the District of Maryland; Jeffrey D. Pittano, Special Agent in Charge of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG), Mid-Atlantic Region; Kareem A. Carter, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation (IRS-CI), Washington D.C. Field Office; William J. DelBagno, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Baltimore Field Office; and Amaleka McCall-Brathwaite, Special Agent in Charge of the Eastern Region Investigations Division of the U.S. Small Business Administration Office of Inspector General (SBA OIG).

The CARES Act was enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic consequences of COVID-19. The CARES Act authorized forgivable loans to small businesses for employee retention and certain business expenses through the Paycheck Protection Program (PPP).

According to court documents between April 2020 and September 2021 Brooks participated in a scheme to fraudulently obtain PPP loans using several entities including Cars Direct by Gavawn HWD Bob’s Motors (Cars Direct), Kingdom Tabernacle of Restoration Ministries where he served as pastor at times and Madaro LLC.

Brooks grossly inflated employee numbers and average monthly payrolls submitting fraudulent IRS Forms 940 Employer’s Annual Federal Unemployment Tax Return among other fraudulent IRS forms to support loan applications.

For example on May 12 2020 Brooks received $1,556589 in fraudulently-obtained PPP loan proceeds deposited into a Cars Direct bank account on which he was the sole signator He also received $1.8 million deposited into a Kingdom Tabernacle bank account Similarly on May 13 2020 Brooks received $204266 deposited into a Madaro bank account

Brooks admitted using loan proceeds for personal benefit including payments not permissible under PPP such as purchasing a residence luxury vehicle restaurant retail store grocery purchases cash withdrawals transfers For instance he opened an account named Payroll by BJM transferring $500000 from Cars Direct PPP loan proceeds registering Payroll by BJM with Maryland State Department listing himself as member sole signator Though appearing associated with payroll company no payroll-related expenses were paid from this account

Additionally Brooks transferred approximately $196000 from Cars Direct account to personal accounts wiring $60407 to Tesla Motors Inc on July 30 purchasing a Tesla Model registered under his name On February 5 transferred $750000 Kingdom Tabernacle PPP loan proceeds Madaro account initiating wire transfer May17 amounting$507010 title company purchase property Upper Marlboro

The District Maryland Strike Force one three established throughout United States investigate prosecute COVID-19 fraud relating CARES Act designed provide emergency financial assistance Americans suffering economic effects caused pandemic focusing large-scale multi-state pandemic relief fraud perpetrated criminal organizations transnational actors interagency law enforcement efforts prosecutor-led data analyst-driven teams identify bring justice those stole pandemic relief funds

For more information Department response pandemic visit https://www.justice.gov/coronavirus Anyone with information about allegations attempted fraud involving COVID-19 can report calling National Center Disaster Fraud NCDF Hotline at866-720-5721 via NCDF Web Complaint Form https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form

U.S Attorney Barron commended FDIC OIG IRS-CI FBI SBA OIG their work investigation Mr Barron thanked Assistant U.S Attorney Sean R Delaney prosecuting case For more information Maryland U.S Attorney’s Office priorities resources available help community visit https://www.justice.gov/usao-md/community-outreach

---