A 25-year-old man from Capitol Heights, Maryland, named Jerry Phillips, also known as Tian Juzo, has pleaded guilty to federal wire fraud conspiracy, aggravated identity theft, and illegal possession of a machine gun. The charges relate to a scheme that Phillips was involved in to fraudulently obtain more than $1 million from the Paycheck Protection Program (PPP) and Economic Injury Disaster loan applications (EIDL) set up under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as well as from unemployment insurance claims.
According to Phillips’ plea agreement, he and his co-conspirators, including his brother Jaleel Phillips, worked together between March 2020 and February 2022 to create fake identities, using the personal identifying information of real people, to apply for PPP and EIDL loans and unemployment benefits. The fraudulent loans and claims were deposited into bank accounts opened in the names of aliases, and the money was then withdrawn through ATM withdrawals and purchases made on associated debit and credit cards or transferred between financial accounts set up under the aliases’ names.
Phillips admitted to using multiple fake identities to submit fraudulent PPP and EIDL loan applications and to using the personal identifying information of over 20 real people to file fraudulent unemployment claims. He also acknowledged that he personally obtained and controlled more than $1 million in fraud proceeds from the fraudulent PPP and EIDL applications. A search of Phillips’ residence found more than 25 fake driver’s licenses from different states and identification documents from various jurisdictions bearing the same alias.
The fraudulent funds were used to purchase goods and services, including a 2020 Chevrolet Camaro that Phillips bought with $65,538.95 of the fraudulently obtained funds. A search of Phillips’ home also uncovered four “ghost guns” that he had purchased online under an alias. He had illegally modified one of the ghost guns into a machine gun capable of firing multiple rounds with one pull of the trigger.
As part of the guilty plea, Phillips admitted to his involvement in the scheme and his responsibility for the wire fraud conspiracy, the aggravated identity theft, and the illegal possession of a machine gun. His brother Jaleel had previously pleaded guilty to his role in the conspiracy and is facing a maximum sentence of 30 years in federal prison. Judge Theodore D. Chuang has scheduled Jerry Phillips’ sentencing for May 16, 2023, at 2 p.m.
The case was investigated by the National Capital Region, U.S. Department of Labor-Office of Inspector General, the Internal Revenue Service-Criminal Investigation Washington, D.C. Field Office, the Small Business Administration-Office of Inspector General, Eastern Region, and the Federal Deposit Insurance Corporation Office of Inspector General, Mid-Atlantic Region. The prosecution is being handled by the U.S. Attorney’s Office for the District of Maryland.
The guilty plea by Jerry Phillips is a reminder that law enforcement agencies are committed to pursuing individuals who attempt to defraud the government and take advantage of programs intended to assist those affected by the COVID-19 pandemic. Authorities have warned that the pandemic has provided opportunities for fraudsters to take advantage of the situation, and they will not hesitate to prosecute those who break the law.
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.
United States Attorney Erek L. Barron commended the DOL-OIG, IRS-CI, SBA-OIG, FDIC-OIG, and the Mississippi Attorney General’s Office for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Harry M. Gruber, who is prosecuting the federal case. He also thanked the Office of Mississippi Attorney General Lynn Fitch-Public Integrity Division, for its assistance.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to report fraud, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/report-fraud.