FLORENCE, SOUTH CAROLINA — Tiffany McFadden, 40, of Brooklyn, New York, and Port St. Lucie, Florida, was sentenced to more than 3 years in federal prison for leading a multi-million-dollar PPP fraud scheme out of South Carolina while working as a U.S. Postal Service employee.
McFadden was charged in the District of South Carolina for her role in a national fraud scheme related to the Coronavirus Aid, Relief, and Economic Security Act’s Paycheck Protection Program (PPP). During the height of the COVID-19 pandemic, Congress authorized the PPP program to provide emergency economic relief to businesses suffering economic harm during as a result of the pandemic.
According to evidence presented in court, McFadden was the leader of a scheme responsible more than 400 fraudulent PPP loan applications, the majority of which were for applicants in the South Carolina towns of Kingstree, Johnsonville, and Hemingway.
McFadden and her co-conspirators manufactured false and fraudulent documents claiming businesses that in truth did not exist and did not lose money due to the COVID-19 pandemic. As a result, McFadden and others received more than $2,000,000 in loans, often approximately $20,000 at a time, that they were not entitled to. Those loans were later fully forgiven by the U.S. Government.
McFadden and others recruited loan applications by word of mouth, manufactured false and fraudulent tax and business documents, and then applied for and obtained forgiveness for the loans. In exchange for her services, McFadden received a portion of the fraudulently obtained funds.
Every dollar stolen from the PPP program was stolen from legitimate businesses who needed support during unprecedented challenges facing our country,” said U.S. Attorney Adair F. Boroughs. “This scheme took advantage of the public’s generosity by stealing millions from taxpayers. We thank our law enforcement partners for bringing accountability in this case.”
“The Secret Service is committed to investigating and pursuing those who engage in fraudulent activity,” said Special Agent in Charge of the Secret Service’s Columbia Field Office Donald Long. “Thanks to the hard work of our partners in the U.S. Attorney’s office, this sentencing reflects the seriousness of the crimes committed and should act as a warning to anyone who thinks they can exploit financial assistance programs without consequence.”
United States District Judge Joseph Dawson, III sentenced McFadden to 37 months in federal prison, a sentence that took into account McFadden’s leadership role in such a sophisticated scheme. Her sentence will be followed by 5 years of court-ordered supervision. There is no parole in the federal system. In addition to her prison term, the court ordered McFadden to pay $2,191.257 in restitution to the Small Business Administration.
Felony charges remain pending against two co-defendants at this time: Cherry Lewis, 43, a U.S. Postal Service employee from Johnsonville, South Carolina; and Keisha Lewis, 33, a U.S. Postal Service employee from Hemingway, South Carolina.
Any member of the public who has information related to scheme is encouraged to contact the Columbia, South Carolina, field office of the U.S. Secret Service at 803-772-4015.
The case was investigated by the U.S. Secret Service, with assistance from the U.S. Postal Inspection Service, the Small Business Administration, the Florence County Sheriff’s Office, and the Williamsburg County Sheriff’s Office. Assistant U.S. Attorneys Elliott B. Daniels and Winston Marosek, who also serves as the Office’s Coronavirus Fraud Coordinator, are prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.