According to a complaint unsealed in federal court yesterday, two homes in midtown Mobile were purchased with proceeds fraudulently obtained from the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). Initially filed under seal in September 2021, the complaint alleges the defendant properties — 754 Marine St. and 960 Dauphin St. — were purchased with proceeds traceable to a conspiracy to commit wire fraud, the proceeds were obtained with a false loan application, and the properties were involved in money laundering transactions.
The complaint claims on June 15, 2020, Jason Pears submitted a PPP loan application in the name of “The Jason Made It Company” through an online lender known as Kabbage, a subsidiary of American Express. Based on representations the loan would preserve seven jobs during the pandemic, just three days later, Kabbage deposited $202,397 into an account controlled by Pears.
The following week, Deborah Ann Tate, described in the complaint as Pears’ mother, filed an application for a PPP loan on behalf of a company called “Nanny for a Week,” which provided a residential address in Fairhope and claimed the loan would preserve 78 jobs during the pandemic. As a result of the application, on July 1, 2020, Kabbage deposited $966,570 into an account controlled by Jason Pears.
“A review of the relevant bank records revealed that proceeds of this loan were used for personal expenditures, including the purchase of cars, real estate, and personal property, rather than authorized business expenditures,” the complaint states. Among those purchases were $48,618.41 toward the home on Marine Street and $335,038.86 toward the purchase of 960 Dauphin Street.
“Without the proceeds of this fraud scheme, Pear’s [bank account] would not have had sufficient funds to finance the purchase of the defendant properties.”
According to separate court documents, Pears himself was indicted by a federal grand jury for the same fraud in April, criminally charged with 26 counts including money laundering, wire fraud and aggravated identity theft. The indictment lists dozens of wire transfers, payments and checks investigators believe to be suspicious, although the recipients of the proceeds were kept confidential. Pears was arraigned May 4, pleading not guilty. He faces a trial in July. The maximum penalty is more than 30 years in prison, fines totaling $1 million, plus restitution and fees. It doesn’t appear Tate has been charged in connection with the loans.
The $953 billion PPP was created as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of 2020. It provided low interest or forgivable loans to small businesses negatively affected by the pandemic. Recipients were required to use the proceeds for business-related expenses such as payroll, mortgage or rent payments and utility costs.
According to data released in December 2020, Nanny for a Week was the third largest loan recipient in the city of Fairhope, behind known, legitimate companies Segers Aero Corp. and Baldwin Physicians Group. At the time, Lagniappe could not find evidence of the business’ existence at the city of Fairhope, in Baldwin County Probate Court, or in the Alabama Secretary of State’s Office. In the years since, experts have suggested as much as 10 percent of loans awarded during the PPP were lost to fraud, while federal prosecutors have since gained dozens of convictions in related cases nationwide.
Jason Pears indictment
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