Detroit man accused of scheme to illegally obtain COVID loans
A Detroit man is charged with wire fraud and accused of stealing a law enforcement officer's identity for information to apply for COVID-19 emergency loans, according to documents unsealed Sunday in federal court.
Joshua R. Hudson allegedly provided false information to the Small Business Administration on at least two occasions to get an Economic Injury Disaster Loan to which he was not entitled, according to the court documents filed in the Eastern District of U.S. District Court.
Hudson allegedly used a false Social Security number of a Jackson County Sheriff's deputy by the same name, and false information linked to ownership of two non-existent businesses to get one loan of $77,400 on July 14, 2020, and attempt to get another, according to court records.
The loans that Hudson, who turned 26 this month, allegedly sought are part of an SBA program offering low interest loans to small businesses and others affected by disaster. The $2.2 trillion federal CARES Act signed into law in March 2020 by former President Donald Trump allowed the SBA to offer funding to businesses negatively affected by the COVID-19 pandemic.
Those who submitted an application provided personal and business information but did not have to offer supporting documentation to address debts as a result of the pandemic along with payroll and other business costs. Applicants had to acknowledge that the information they submitted was true.
Wells Fargo Bank informed HSI that Hudson in August 2020 allegedly had received the $77,400 loan. It was deposited into his personal bank account, court documents show.
"According to the bank representative, Joshua R. Hudson was hesitant and evasive when asked about his underlying business associated with this SBA loan," according to the documents. "Joshua R. Hudson wanted to withdraw all the money in his account and complained he had to drive all the way to Illinois from Michigan to get this money for his camera business."
The San Francisco-based bank does not have locations in Michigan.
Hudson allegedly made nine cash withdrawals in amounts ranging from $103 to $50,010 totaling $75,924 from two Wells Fargo bank locations in Illinois, and from ATMs not affiliated with the bank in Detroit, Harper Woods and Detroit Beach, near Monroe. Many cash withdrawals were made on the same day.
Several of the withdrawals were on the same day or consecutive banking days "in amounts aggregating above the $10,000 Currency Transaction Report (CTR) filing threshold, thereby giving the appearance of structuring to evade the filing of a CTR," the federal document said.
A special agent with the U.S. Department of Homeland Security Investigations, reviewed two loan applications allegedly made by Hudson and discovered that one of the businesses, Good Productions, listed an address in Detroit that belonged to another business. Hudson's personal Detroit address did not match the one listed on the application and phone numbers did not match. The agent also discovered that Good Productions was not a registered business in Michigan.
The Social Security number listed belonged to a man with the same name as Hudson but a different middle name, who lived in Brooklyn, Michigan, and worked as a Jackson County Sheriff's deputy.
The deputy said in an interview that he did not apply for the loan, never banked with Wells Fargo, never heard of Good Productions and had never been to the business address listed on the application.
An investigation showed that Hudson had an account with TCF Bank. A $50,000 Wells Fargo cashier's check from Illinois was deposited into the TCF account. Two weeks later, the money was gone.
The special agent found similar discrepancies on the application for a loan Hudson allegedly submitted for a business named Puppy Drip.
Hudson allegedly used someone else's Social Security Number for Good Productions, the documents assert, and because that person had good credit, Hudson allegedly got the loan. He used his own Social Security number for Puppy Drip and was denied the loan because of his credit history, the documents claim.
"There is probable cause to believe that Joshua R. Hudson devised and perpetrated a scheme or artifice to defraud financial Institutions," the agent wrote.
Hudson made his first appearance in federal court on Sunday, records show.
He was appointed a federal defender as his attorney, listed as Nancy McGunn. Neither she nor her client immediately responded to requests for comment Monday.
Hudson has been released on a $10,000 bond, according to federal court records. A preliminary examination is scheduled for 1 p.m. April 18.
Staff Writer Mark Hicks contributed.