(The Center Square) – A federal jury deliberated about two hours before convicting a former Seattle man on five felony counts of wire and bank fraud in obtaining $500,948 in COVID-19-related funds.
Donte Jamal McClellon, 30, was convicted Thursday following a three-day trial in U.S. District Court of Seattle. He is scheduled to be sentenced April 10 by federal Judge Lauren King.
Authorities alleged that McClellon used the names of three inactive limited liability corporations he had once registered in Washington state in filing bogus claims for employee-wage compensation through the pandemic-related Paycheck Protection Program in May and June of 2020.
McClellon was accused of forging multiple Internal Revenue Service forms making it appear the three companies each had up to 13 employees engaged in real estate, wholesale, or retail businesses who would benefit from PPP loans. McClellon claimed the businesses operated out of his home address in Seattle, but investigators said there was no business activity at the address and no signs of business activity in any state or federal registries in years leading up to the pandemic.
The idle companies were identified as Frostlake, Cannonlake, and Skylake LLCs. In his applications for PPP funds, McClellon in one instance showed gross receipts of more than $1.6 million.
Authorities said the monies McClellon received were disbursed to bank accounts set up just days before making the loan applications, then moved to a personal bank account he controlled.
McClellon, who later moved to New York, “used the money to pay his rent on a Manhattan apartment, for travel and gym memberships, and some $20,000 on Uber rides among other personal, non-business expenses,” according to a press release issued Thursday by Tessa M. Gorman, Acting U.S. Attorney for the Western District of Washington.
At trial, McClellon was convicted of three counts of wire fraud and two counts of bank fraud, Gorman said.
The case was investigated by the FBI’s Seattle Field Division with assistance by FBI officials in New York and the Small Business Administration’s Office of Inspector General, and prosecuted by Assistant U.S. Attorneys Lauren Watts Staniar, Jessica Murphy Manca, and Sok Tea Jiang.
Federal authorities established a COVID-19 Fraud Enforcement Task Force in May 2021 to investigate and prosecute domestic and international criminal activities stemming from the U.S. response to the pandemic. Allegations of suspected fraud can be filed at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
