A federal judge in Raleigh, North Carolina, has sentenced Edward Sheldon Whitaker to 120 months in prison and his wife, Schunda Coleman, to 84 months for organizing a nationwide COVID-19 fraud scheme. The couple was also ordered to pay over $10 million in restitution after pleading guilty to conspiracy to commit money laundering. Their actions facilitated dozens of North Carolina residents in obtaining fraudulent Paycheck Protection Program (PPP) loans during the pandemic.
The court imposed forfeiture money judgments totaling $3,872,548.24 against Whitaker and Coleman. Additionally, the couple must forfeit their marital residence in Edinburg, Texas, along with other accounts and property.
“Defrauding our nation during an emergency is disgraceful. Today’s sentences send a loud and clear message,” said U.S. Attorney Ellis Boyle. “While hardworking Americans pulled together during the pandemic, these defendants chose to line their own pockets. This office will continue delivering tough, no-nonsense justice to anyone who steals from taxpayers – we will not let fraudsters get rich off the backs of honest citizens.”
Special Agent-In-Charge Donald “Trey” Eakins of IRS Criminal Investigation’s Charlotte Field Office commented on the case: “The defendants created a scheme with the sole intent of enriching themselves during a national crisis. They orchestrated a recruitment program to generate millions of dollars in fraudulent Paycheck Protection Program loans meant for those in need during the COVID-19 Pandemic. IRS-CI will continue its collaborative investigative efforts alongside our law enforcement partners to find those stealing from the federal government and subsequently the taxpayers.”
According to court documents, Whitaker and Coleman ran their operation from Edinburg, Texas. They produced fake supporting documents and payroll records for co-conspirators seeking PPP loans for non-existent businesses across the country. For a fee, they coached applicants on how to falsify employee numbers and wage data so that their applications would appear legitimate. Instructing individuals on disguising loan proceeds as wages was another part of their strategy; however, much of this money was ultimately funneled back to themselves.
Their activities led to more than $15 million being disbursed through fraudulent PPP and Economic Injury Disaster Loan Program (EIDL) applications nationwide. To expand their operation further, they paid intermediaries who recruited additional participants willing to submit false loan applications.
More than thirty people involved with Whitaker and Coleman have already received federal prison sentences related to this scheme.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted by Congress in March 2020 as an emergency response measure intended to help Americans facing economic hardship due to COVID-19 disruptions. The CARES Act authorized up to $649 billion in forgivable loans through programs like PPP—funds distributed by financial institutions but guaranteed by the Small Business Administration—to support small businesses affected by the pandemic.
Assistant U.S. Attorney David G. Beraka prosecuted these cases following investigations conducted by IRS Criminal Investigation.
