Pennsylvania Tax Preparer Sentenced to 18 Months for Bank Fraud in PPP Loan Scheme

A York, Pennsylvania, tax preparer has been sentenced to 18 months in federal prison and ordered to pay over $340,000 in restitution for his role in a bank fraud scheme involving fraudulent Paycheck Protection Program (PPP) loan applications. Dommonick T. Chatman, 50, of York, was sentenced by Senior United States District Judge Malachy E. Mannion. The sentence comes after Chatman pleaded guilty to one count of bank fraud.

The fraudulent activities, which took place over several months in 2021, involved Chatman’s business, The Chatman Group, LLC. He admitted to either preparing or approving the preparation of numerous fraudulent PPP loan applications on behalf of nearly twenty individuals. The total amount requested in these applications exceeded $400,000, with approximately $341,438.82 ultimately disbursed. Chatman received about 5% of each loan, or approximately $1,000 per application, and shared these proceeds with employees who assisted in processing the applications.

To qualify for a PPP loan, businesses were required to demonstrate they were in operation by February 15, 2020, and provide information about their employees and expenses, along with supporting documentation. Investigations revealed that many of the applications processed through Chatman’s business were fraudulent because the applicants either did not have businesses established by the required date or did not possess the income levels to justify the loan amounts they sought. Chatman, who had prepared tax returns for many of these applicants as existing clients of The Chatman Group, was aware of the fraudulent nature of their applications.

In addition to the fraudulent loan submissions, Chatman also obstructed the government’s investigation. He admitted to disposing of a handwritten list that documented the names of clients who had received PPP loan applications through his company. The investigation into this matter was conducted by the FBI Philadelphia’s Capital Area Resident Agency and the U.S. Department of the Treasury, Office of Inspector General. Assistant U.S. Attorneys Ravi Romel Sharma and K. Wesley Mishoe prosecuted the case.

The Fraud Section of the Criminal Division has been leading prosecutions for schemes exploiting the Paycheck Protection Program. Since the CARES Act was enacted, this section has prosecuted over 150 defendants in more than 95 criminal cases. These efforts have resulted in the seizure of over $75 million in cash proceeds, along with numerous real estate properties and luxury items acquired with fraudulently obtained PPP funds.

This case highlights the government’s ongoing efforts to combat fraud related to COVID-19 relief programs. The PPP was designed to provide financial assistance to small businesses struggling during the pandemic, but it became a target for individuals seeking to defraud the system. The restitution ordered in Chatman’s case will be paid to the U.S. Government, recouping some of the funds lost to the scheme. Residents are reminded that participation in such fraudulent activities can lead to severe penalties, including imprisonment and financial restitution.

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

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