South Carolina PPP Loan Fraud Lawyer

South Carolina PPP Loan Fraud Lawyers: Federal Defense When Operation Trendsetter or DOJ Task Force Targets Your COVID Relief Loan

South Carolina federal prosecutors have launched one of the most aggressive PPP fraud enforcement campaigns in the country. Operation Trendsetter, a named joint investigation between the U.S. Attorney’s Office and the Department of Justice’s Organized Crime and Gang Section, has resulted in dozens of prosecutions across the Lowcountry. This is not routine white collar crime enforcement. Federal prosecutors are treating PPP fraud as part of a broader pattern of criminal activity alongside drug trafficking and gun crimes.

The cases coming out of South Carolina demonstrate that no one is beyond prosecution. Anthony Harley was incarcerated in the South Carolina Department of Corrections when he committed PPP fraud. He still received two years in federal prison to be served after his state sentence. Lori Hammond had 18 prior financial crime convictions dating back to the 1990s. The same judge who sentenced her years earlier for a different scam sentenced her to 80 months for PPP fraud. Your criminal history and current circumstances will not protect you from prosecution.

What makes South Carolina prosecutions particularly concerning is the spending patterns that trigger investigation. Both Hammond and her co-conspirator Catherine Needham used PPP funds for plastic surgery. Prosecutors specifically cited this spending at sentencing. Luxury purchases, home improvements, golf carts, and vehicles appear repeatedly in case filings. If you obtained a PPP loan and spent it on anything other than legitimate payroll and business expenses, federal agents may already be building a case.

The District of South Carolina operates as a single federal judicial district covering the entire state from Charleston to Columbia to Greenville. All federal PPP fraud cases go through the U.S. Attorney’s office regardless of where in South Carolina your business was located. Understanding how this district prosecutes pandemic relief fraud is essential to evaluating your situation and planning an effective defense.

If you received a PPP loan and are worried about your application or how you spent the funds, this article explains what federal prosecutors are actually charging in South Carolina, what sentences defendants have received, and why early consultation with experienced federal defense counsel matters. The wire fraud statute carries up to 20 years per count, but understanding what real defendants in South Carolina have received is more useful than focusing on theoretical maximums.

Operation Trendsetter and the DOJ Task Force

South Carolina’s PPP fraud prosecutions are beeing driven by Operation Trendsetter, a named enforcement operation announced in May 2023. This isnt a routine investigation by a single agency. Operation Trendsetter operates in partnership with the Department of Justice’s Organized Crime and Gang Section, indicating that federal prosecutors view PPP fraud in South Carolina as connected to broader criminal enterprises.

The U.S. Attorneys office described these prosecutions as targeting “illegal drugs, guns, and financial crimes.” When prosecutors link PPP fraud to drug trafficking and weapons offenses, they treat cases more aggressivley. Defendants face enhanced scrutiny and potentially harsher sentences becuase prosecutors view the fraud as funding other criminal activity rather then being an isolated mistake.

On May 17, 2021, Attorney General Merrick Garland established the COVID-19 Fraud Enforcement Task Force to marshal federal resources against pandemic relief fraud. South Carolina has been particuarly active in this effort. The FBI Columbia Field Office, IRS Criminal Investigation, SBA Office of Inspector General, and other agencies work together on these investigations. When multiple agencies are involved, investigations are more thorough and harder to defend against.

The Lori Hammond Case – 80 Months for Repeat Offender

Lori Hammond’s case shows how criminal history dramaticaly affects sentencing in South Carolina. Hammond, using aliases including Lori McCracken and Lori Blakely, submitted over $11 million in fradulent PPP and EIDL loan applications. She personally recieved $3,162,038.50 in loan proceeds.

What drove her 80-month sentence wasnt just the fraud amount. Hammond had 18 prior financial crime convictions dating back to the 1990s. The judge who sentenced her, Senior Judge Richard Gergel, had sentenced her years earlier for a different financial scam. When he gave her 80 months, he explicitly cited her lengthy criminal record and her role as the schemes ringleader.

Hammond’s case also demonstrates how identity theft compounds PPP fraud charges. She used the identity of a deceased individual in her applications, misrepresented employee counts and payroll expenses, fabricated companies, and submitted fake tax documents. Each of these acts creates seperate criminal exposure beyond the basic wire fraud charges.

Prosecutors showed that Hammond spent her PPP funds on a home, luxury vehicles, a golf cart, and plastic surgery. None of these are permitted uses under the program. The court orderd her to pay $2,722,932.50 in restitution, representing the remaining unpaid loan funds. Her case shows that ringleaders of large schemes face substancial prison terms, especialy when they have prior convictions.

Plastic Surgery and Luxury Spending Patterns

A striking pattern in South Carolina prosecutions is the frequency with which defendants spent PPP funds on plastic surgery. Both Lori Hammond and Catherine Needham used loan proceeds for cosmetic procedures. Prosecutors specificaly cited this spending at sentencing hearings. It appears to be a red flag that investigators look for when reviewing how borrowers used there funds.

Needham recieved $1,244,200 in fradulent loan proceeds. She used the money for property purchases, a golf cart, a pool, home improvements, and plastic surgery. Her 21-month sentence reflects her role as a co-conspiritor rather then the ringleader, but the spending pattern was clearly an aggravating factor.

Other defendants in South Carolina cases spent PPP funds on personal expenses including vehicles, home purchases, and lifestyle upgrades. Jontrell Wright recieved 15 months for using $561,700 on unapproved personal expenses. Christopher Conrad got 12 months and one day for spending $898,300 on personal expenses. The common thread is that defendants who used PPP funds for obviousely non-business purposes face prison sentences.

If you obtained a PPP loan and spent any portion on personal expenses, investigators may already be looking at your bank records. Federal agents review how funds were disbursed and compare that to permitted uses. Large purchases, transfers to personal accounts, and lifestyle changes that coincide with loan receipt all draw scrutiny.

Fraud While Incarcerated – The Anthony Harley Case

Perhaps the most remarkable case from South Carolina involves Anthony Harley, who committed PPP fraud while he was incarcerated in the South Carolina Department of Corrections. Despite being behind bars, Harley participated in a scheme to obtain fradulent loans. He recieved a two-year federal sentence to run after his state imprisonment.

Harley was part of a multi-generational family fraud operation. His relatives Staci Harley (3 years) and Roberta Harley (time served) were also convicted. The Harley family case shows that federal prosecutors will pursue everyone involved in a fraud scheme, regardless of there relationship or circumstances. Being in prison didnt protect Anthony Harley, and family ties didnt prevent prosecutors from charging multiple relatives.

The five Lowcountry defendants sentenced through Operation Trendsetter obtained 12 PPP loans and 3 EIDL advances totaling $295,841. While smaller then the Hammond scheme, all five recieved prison sentences. Sheniqua Mitchell got 33 months. Benjamin Blue recieved one year and one day. Even Roberta Harley at age 61 was convicted, though she recieved time served.

Federal Charges in South Carolina PPP Cases

South Carolina PPP fraud defendants typically face multiple federal charges. Understanding these charges helps you evaluate your potential exposure.

Wire fraud under 18 U.S.C. § 1343 is almost always charged becuase PPP applications were submitted electronically. Each fradulent application can constitute a seperate count carrying up to 20 years in prison. Most defendants in South Carolina pled guilty to wire fraud or conspiracy to commit wire fraud.

Bank fraud under 18 U.S.C. § 1344 applys when defendants made false statements to financial institutions and carries up to 30 years per count. Money laundering charges under 18 U.S.C. § 1956 come into play when defendants moved funds to conceal there origin or purpose. Identity theft charges apply when defendants used another persons information, as Hammond did with the deceased individuals identity.

Conspiracy under 18 U.S.C. § 371 is particularly dangerious in South Carolina becuase prosecutors have demonstrated a willingness to charge entire networks. The Harley family case and the Hammond ring both involved conspiracy charges against everyone who participated, regardless of how large or small there individual role.

Real Sentences in South Carolina Cases

Understanding actual sentences handed down in South Carolina helps you evaluate potential outcomes more accuratley then focusing on statutory maximums.

At the high end, Lori Hammond recieved 80 months for her role as ringleader of an $11 million scheme, with substancial aggravation from her 18 prior convictions. This is among the longest PPP fraud sentences in the state and reflects multiple aggravating factors.

Mid-range sentences include Staci Harley’s 36 months and Sheniqua Mitchell’s 33 months. These defendants played significent roles in there respective schemes but were not the primary organizers. There sentences reflect cooperation levels and the specific fraud amounts attributable to each defendant.

Lower sentences went to defendants with smaller roles or who cooperated extensivley. Christopher Conrad recieved 12 months and one day for $898,300 in fraud. Benjamin Blue got one year and one day. These defendants pled guilty and accepted responsability. Roberta Harley, at age 61, recieved time served for conspiracy charges.

Signs Your Under Investigation in South Carolina

Federal PPP fraud investigations often proceed quietly for months. Recognizing warning signs can help you take apropriate steps before the situation escalates.

Direct contact from federal agents is the clearest sign. If FBI agents, IRS Criminal Investigation agents, or SBA OIG investigators contact you about your PPP loan, you are being investigated. Operation Trendsetter involves multiple agencies working together. Do not answer there questions without an attorney present.

Less obvious signs include banks notifying you about subpoenas for account records, former employees or buisness partners mentioning they were questioned about you, or accountants recieving requests for documents. Any of these events suggests prosecutors are gathering evidence.

Grand jury subpoenas are a clear indication that indictment may be forthcomming. If you recieve a subpoena to testify or produce documents, having experienced federal defense counsel is absolutley essential. Your testimony could be used against you or result in additional charges.

What to Do If Federal Agents Contact You

Your response when federal agents first contact you can significently affect your case. Heres what you should and shouldnt do.

Do not answer questions about your PPP loan without an attorney. You have the right to remain silent under the Fifth Amendment. Agents are trained interrogators and anything you say becomes evidence. Simply say “I’d prefer to speak with an attorney before answering any questions.”

Do not lie to federal agents. Making false statements to a federal officer is a seperate crime under 18 U.S.C. § 1001 carrying up to 5 years in prison. Many defendants have made there situations worse by trying to explain away there applications.

Do not destroy documents. Obstruction of justice charges can be added if prosecutors believe you destroyed evidence. Keep all records related to your PPP application.

Contact an experienced federal criminal defense lawyer immediatley. Time is critical. An attorney can sometimes negotiate with prosecutors before charges are filed to prevent prosecution or reduce charges.

Potential Defenses in South Carolina Cases

Several defenses may be available depending on your specific situation. An experienced federal defense attorney can evaluate which defenses apply to your case.

Lack of intent is the most common defense. The government must prove you knowingly and intentionaly made false statements. If you genuinley believed your application was accurate based on your understanding of program requirements, you may lack the criminal intent required for conviction.

Mistakes do not automaticaly equal fraud. If you miscalculated payroll expenses or misunderstood counting rules, that error might not constitute criminal fraud. The distinction between honest mistakes and intentional deception is critical.

Cooperation and restitution can significently reduce sentences. South Carolina defendants who cooperated early and made efforts to repay funds recieved lower sentences. The difference between Christopher Conrads 12 months and Lori Hammonds 80 months reflects not just fraud amount but cooperation, criminal history, and role in the scheme.

Taking Action to Protect Yourself

If you have concerns about your PPP loan application, taking proactive steps now is far better then waiting for Operation Trendsetter or another federal task force to contact you. South Carolina is one of the most aggressive states for PPP fraud prosecution.

An experienced federal defense attorney can help you evaluate your situation. Some defendants have benifited from approaching prosecutors before being charged. Voluntarily disclosing problems and offering repayment can sometimes result in civil resolution rather then criminal charges. However this aproach requires careful legal guidance.

Whether your currently under investigation or simply worried about potential exposure, preserving documents and avoiding suspicious actions is important. Do not make unusual transfers that could be interpretted as hiding assets.

South Carolina PPP fraud prosecutions show that criminal history matters enormously, spending patterns trigger investigation, and even being incarcerated doesnt protect you. The federal sentencing guidelines provide structure, but individual circumstances determine outcomes. Understanding your specific situation requires consulting with federal defense counsel who knows the District of South Carolina and can advise you on the best aproach for your circumstances.