A Mineral Wells man is among 18 named in a federal indictment and charged with conspiracy to commit wire fraud.

Michael Lewayne Hill, 47, of Mineral Wells, and Andrew Charles Moran, 43, of Lewisville are accused of executing a scheme to defraud lenders and the Small Business Administration’s  Paycheck Protection Program, according to the Eastern District of Texas. Hill is accused of recruiting co-conspirators to use an existing or create a new business to submit applications to obtain PPP funding. Once enlisted, Morgan is accused of assisting co-conspirators with the application paperwork, including fabricating supporting documentation and submitting the application through online portals.

The defendants are alleged to have misrepresented material information such as the true nature of their business, number of employees and the amount of payroll.  Based on these material misrepresentations, the SBA and other financial institutions approved and issued loans to the defendants.  Once in receipt of the fraudulently obtained funds, the defendants did not use the money as intended, such as to pay employee salaries, cover fixed debt or utility payments, or continue health care benefits for employees, and instead typically paid Hill and Moran, transferred money to their personal accounts and spent the funds on various personal purchases, according to the EDT. In other instances, some sent money to another man for purported investment in foreign exchange markets.

In total, 16 loans and at least $3.5 million is suspected to be fraudulently obtained. If convicted, the defendants each face up to 20 years in federal prison.

Others indicted and charged include:

• Peter Keovongphet, of Ft. Lauderdale, FL;

• Ty Alan Burkhart, 34, of Frisco;

• Jason Lawrence Geiger, 47, of McKinney;

• Eric Reed Marascio, 50, of Allen;

• Christopher Lee McElfresh, 43, of Frisco;

• Cord Dean Newman, 44, of Homosassa, FL;

• Elmer Omar Ayala, 45, of Midlothian;

• Gregory Fitzgerald Hatley, Jr., 38, of Allen;

• Alexander Eric Cortesano, 52, of Dallas;

• Arthur Atik Pongtaratik, 33, of Carrollton;

• Miles Justin Urias, 34, of Richardson;

• Fabian C. Hernandez, 44, of Lake Alfred, FL;

• Daniel Lee Warren, 33, address unknown;

• Rajaa Bensellam, 49, of Allen;

• Hadi Mohammed Taffal, 50, of Allen; and

• Jonathon James Spencer, a/k/a Spence, 33, of Rowlett.  

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent.  PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within eight weeks of receipt and use at least 75 percent of the forgiven amount for payroll. 

This case is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigations.  This case is being prosecuted by Assistant U.S. Attorneys in the Eastern District of Texas.

A grand jury indictment is not evidence of guilt, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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