Baltimore City Wire

Melvin Thompson Jr., a 34-year-old resident of Chestertown, Maryland, has pleaded guilty to charges of wire fraud and filing a false tax return. The charges are linked to fraudulent loan applications under the CARES Act, as announced by U.S. Attorney Erek L. Barron for the District of Maryland and SAC Kareem A. Carter from the IRS-CI Washington, D.C. Field Office.

The CARES Act was enacted in March 2020 to provide financial relief during the COVID-19 pandemic. It included programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) to assist small businesses with job retention and other expenses.

Thompson's plea agreement reveals that he executed a scheme from March 2020 until February 22, 2021, defrauding the U.S. Small Business Administration by obtaining fraudulent loans through PPP and EIDL. He also filed false corporate tax returns with fictitious revenue figures on behalf of four businesses seeking EIDL funds.

In his fraudulent activities, Thompson submitted unfiled tax returns and occasionally filed false ones with the IRS to support his loan applications under the CARES Act.

The proceeds from these loans were primarily used by Thompson for high-frequency trading in options contracts and securities at TD Ameritrade. During 2020 alone, he traded over $12 million in securities but lost $791,004 gained through this scheme except for funds spent on purchasing a 2020 Lincoln Navigator.

This case is part of efforts by one of five strike forces established across the United States by the Department of Justice to combat COVID-19 related frauds like those involving CARES Act funds.

For further details on pandemic-related responses or reporting attempted fraud involving COVID-19 relief funds, individuals can visit designated websites or contact hotlines provided by authorities.

U.S. Attorney Barron praised IRS-CI's role in investigating this case and acknowledged Assistant U.S. Attorney Sean R. Delaney's work in prosecuting it.