Two individuals, one current and one former employee of the Department of Veterans Affairs, have been indicted and charged with fraudulently obtaining pandemic-related loans intended for small businesses. The charges involve falsified information submitted to secure Paycheck Protection Program (PPP) loans during the COVID-19 pandemic.
Kahroun Armstrong, 48, of Black Jack, Missouri, also known as Kahroun Leflore, and Dortatius L. Hill, 41, of St. Louis, were both indicted on September 4. Armstrong faces two counts of bank fraud, two counts of wire fraud, and one count of making a false statement. Hill faces identical charges. Both individuals appeared in U.S. District Court in St. Louis on Wednesday, where they pleaded not guilty.
Hill, who remains employed by the VA, is accused of applying for two PPP loans in April 2021 under a business named “Dortatius Hill.” According to the indictment, Hill falsely claimed the company had a gross income of $120,000. He received a $20,833 loan on April 16, 2021, and a second loan for the same amount on May 5, 2021. Additionally, Hill allegedly sought loan forgiveness under fraudulent pretenses.
The PPP loans were designed to help businesses retain jobs and cover expenses during the COVID-19 pandemic.
Armstrong, who is no longer employed by the VA, is accused of applying for two PPP loans on March 29, 2021, for separate businesses: Arm & Arm In Home Health Care Services LLC and Arm & Arm Motors LLC. Armstrong falsely claimed the healthcare company was founded in 2018 and had $145,655 in gross income, while Arm & Arm Motors was reported to have $155,000 in gross income. Both loans were approved, each totaling $20,832. The indictment also alleges Armstrong sought and successfully obtained loan forgiveness for both loans.
It is important to note that an indictment is merely an accusation, and all defendants are presumed innocent unless proven guilty in a court of law.
Bank fraud carries a maximum penalty of 30 years in prison, a $1 million fine, or both. Wire fraud is punishable by up to 20 years in prison and a fine of $250,000. Making a false statement can result in up to five years in prison and a $250,000 fine.
The investigation was conducted by the Department of Veterans Affairs Office of Inspector General, with Assistant U.S. Attorney Jennifer Roy handling the prosecution.
