Detroit man who spent COVID-19 cash on new cars pleads guilty
Detroit — A Detroit man pleaded guilty Friday to defrauding an emergency loan program designed to help businesses survive the COVID-19 outbreak by spending the money on new cars.
Darrell Baker, 56, pleaded guilty to bank fraud and money laundering and is the first person in the Detroit region convicted of cheating the emergency COVID-19 loan program. The felony is punishable by up to 30 years in federal prison.
“My office and our law enforcement partners have no tolerance for frauds affecting programs designed to help our economy survive the Covid-19 pandemic," U.S. Attorney Matthew Schneider said in a statement.
Baker's court-appointed lawyer Benton Martin declined comment Friday.
Prosecutors say he obtained a $590,000 Payroll Protection Program Loan for his company Motorcity Solar Energy. In applying for money from the $649 billion loan program, Baker claimed the company had 68 employees and that payroll was $2.8 million.
The information, however, was false, prosecutors said.
The company had no employees, no payroll expenses and was defunct.
After obtaining the loan, Baker withdrew $172,000 and bought four vehicles: two Cadillac Escalades, a Dodge Charger and a Hummer.
Baker is forfeiting the vehicles as part of his guilty plea and has agreed to pay $172,484.40.
Baker will be sentenced Jan. 14 by U.S. District Judge Laurie Michelson.