Former Baltimore City Council Candidate Receives Four-Year Sentence for $1.7 Million COVID-19 Relief Fraud Scheme

A former Baltimore City Council candidate has been sentenced to four years in federal prison for orchestrating a significant fraud scheme that defrauded the government out of approximately $1.7 million in COVID-19 relief funds. The scheme involved the fraudulent acquisition of Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans under the guise of multiple businesses she had incorporated.

The sentencing of Nichelle Henson, 38, of Baltimore, was announced by U.S. Attorney Kelly O. Hayes for the District of Maryland and Special Agent in Charge Jimmy Paul of the FBI’s Baltimore Field Office. The court heard evidence that Henson established several businesses in Maryland, including Crowns Construction, LLC; Nichelle Henson Campaign, LLC; One Stop for Services, LLC; Your Friendly Tax Preparation Services, LLC; Women Entrepreneurs Can Succeed, LLC; and Peace of Mind Services, Inc. She proceeded to open bank accounts for some of these entities and obtained necessary tax identification numbers.

Between 2020 and 2021, Henson submitted six fraudulent EIDL applications to the Small Business Administration (SBA) on behalf of her various businesses. These applications contained fabricated information regarding each business’s gross receipts, costs of goods sold, and the number of employees. Crucially, at the time of these submissions, none of the purported businesses were operational, nor did they have any employees. Despite this, Henson successfully obtained $18,000 in federal funds from the SBA through these fraudulent applications.

Further investigation revealed that Henson also submitted six PPP loan applications between April 30, 2020, and June 29, 2020. Notably, one of the entities involved, the Nichelle Henson Campaign, LLC, was intended to support her bid for Baltimore City Council. However, records indicated that Henson had withdrawn her candidacy for the council seat in November 2019, prior to submitting the loan application in May 2020. These six fraudulent PPP applications ultimately resulted in Henson receiving $998,590.

The fraudulent activity did not cease there. On January 19, 2021, Henson submitted six additional fraudulent PPP loan applications, this time to M&T Bank, again using her purported businesses as fronts. These applications were replete with false statements concerning the existence of the businesses, their employee numbers, and payroll expenses. In total, Henson illicitly obtained $1,692,840 through her deceptive practices.

The funds acquired through this elaborate scheme were used for a variety of personal and business-related expenses that were not permissible under the PPP guidelines. These expenditures included cosmetic surgery, extensive renovations to both her own home and the home of a family member, a full year’s rent payment for her personal residence, and a year’s rent for a new business venture. Additionally, Henson invested in other new business endeavors, such as a used-car dealership that never opened and the creation of a cryptocurrency called Subina Coin, which was intended to fund an entity known as the “Adageyhdi Indian Nation.”

This prosecution is part of the District of Maryland’s participation in the COVID-19 Strike Force initiative, a national effort established by the Department of Justice to combat fraud related to the CARES Act and other pandemic relief programs. These interagency task forces are designed to identify and prosecute individuals and organizations responsible for large-scale pandemic relief fraud. The CARES Act was enacted to provide vital financial assistance to Americans impacted by the economic fallout of the COVID-19 pandemic.

Individuals with information regarding attempted fraud involving COVID-19 relief funds are encouraged to contact the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or submit a complaint form online.

Article by Mel Anara, based upon information from the U.S. Attorney’s Office, District of Maryland

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