Detroit man first to be charged with COVID-19 crime locally
Detroit — Federal prosecutors unsealed a criminal case Wednesday against a Detroit man who is the first person locally charged with defrauding an emergency loan program designed to help businesses survive the COVID-19 outbreak.
Darrell Lamont Baker, 51, schemed to obtain almost $600,000 from the Paycheck Protection Program and laundered money distributed by the U.S. Small Business Administration by buying four vehicles, including two Cadillac Escalades, a Dodge Charger, and a Hummer, according to the unsealed criminal complaint.
The investigation dates to May 13 after a Michigan First Credit Union official alerted the FBI to a fraudulent $590,900 loan on behalf of Motorcity Solar Energy Inc. State business records list Baker as company president.
"Defrauding banks to obtain loans is never acceptable, and doing so during our current national emergency is unconscionable," U.S. Attorney Matthew Schneider said in a statement Wednesday.
The application listed an office on the fifth floor of the Michigan Building on Bagley Street in downtown Detroit. But Motorcity Solar Energy does not have an office there and that address is not listed on state business records for the company, according to the complaint. Other addresses listed for the business were single-family homes, prosecutors said.
The application said Baker's company employed 68 people and that payroll last year totaled $2.8 million. But state business records show the company was dissolved in July 2019, long before the COVID-19 outbreak.
Motorcity also never established an account with the state's unemployment insurance program, a prerequisite for valid businesses in Michigan, prosecutors said.
Investigators tracked what happened to the emergency loan money.
Baker purchased four cashier's checks and withdrew $60,000 in mid-May, according to the FBI. Until then, the account had been inactive for a long time. After the money was withdrawn, the account was frozen.
None of the cashier's checks went toward payroll, according to the FBI. Instead, more than $108,993 went to a Redford Township auto dealership.
Baker kept two vehicles. His brother-in-law received one and so did his sister, prosecutors said.