Michigan man accused of fraudulently receiving over $5.2M in pandemic-era federal relief funds
A Michigan man is charged with fraudulently receiving over $5.2 million in Paycheck Protection Program loans during the COVID-19 pandemic and using the funds for his personal expenses, according to the U.S. Attorney's Office for the Eastern District of Michigan.
Randon Williams is charged with one count each of wire fraud and monetary transactions with property from an unlawful act, according to the criminal complaint.
U.S. lawmakers created the Paycheck Protection Program in March 2020 to provide emergency assistance to businesses that faced financial challenges at the outbreak of the pandemic, according to federal officials. Eligible companies could apply for loans guaranteed by the Small Business Administration and later seek to have them forgiven.
According to prosecutors, Williams, who is a West Bloomfield resident, submitted a PPP borrower application on behalf of The Romero Group for a $348,145 loan in April 2020, the complaint said. The Romero Group was organized by Williams in 2017 and had a social media page identifying the company as a construction firm offering commercial and residential development and construction.
According to the complaint, the loan was approved and proceeds were distributed electronically into The Romero Group's bank account, of which Williams was the sole signer.
Williams submitted a second application on behalf of The Romero Group for a loan of the same value in March 2021, the court document said. The loan was approved and, again, disbursed into the company's bank account.
The complaint, which cited bank records, said Williams used around $275,000 in funds from the two loans to purchase cashier's checks that he "ultimately deposited into other bank accounts at outside institutions in the name of The Romero Group and other businesses he owned and controlled."
According to the court document, the funds "appear" to have been used to support Wlliams' personal spending, including the purchase of a Rolls-Royce, a down payment on a home, luxury clothes, dining, furniture and fitness equipment.
The complaint said Williams also transferred over $383,300 in funds from the two loans to Paychex, Inc., a company that provides payroll processing services. Records from Paychex showed accounts associated with Williams were created in May 2020, almost a month after he received the first loan. The records also showed none of the employees listed had been hired before 2020, the court document said.
The money transferred to Paychex was moved to Williams' personal account and three other businesses he owned and controlled, according to the court document.
"Again, the funds transferred to Williams appear to have gone to support his personal spending," the complaint said.
Williams submitted two PPP borrower applications, in May 2020 and March 2021, on behalf of Step Ladder Construction for loans totaling over $3 million, according to the court document. Articles of incorporation for the business were filed in 2011 with Williams listed as the registered agent.
The business, per the complaint, doesn't appear to have a website or social media, but was referenced on The Romero Group's Facebook page.
Both applications filed on behalf of Step Lader Construction, which SBA records said were to be used for payroll, were approved and funds were deposited into the business's bank account, according to the court document. Williams then withdrew around $700,000 of the funds into another Step Ladder account he exclusively controlled and transferred the rest to Paychex accounts.
From Paychex, Williams was paid over $1.7 million to himself and his other businesses, and more than $376,000 was paid to three people who appear to be his relatives or close associates, the complaint said. Williams appeared to use the funds as a down payment on a $2.4 million home, for dining and at luxury clothing stores, according to the court document.
The complaint, citing bank records and state and federal forms, said the applications "fabricated or misrepresented the number of employees and the average monthly payroll expenses at each business."
According to the court document, the four PPP loans were not the only ones received by Williams. It cited records obtained from the SBA and other SBA-approved lenders, which showed "additional PPP loans linked to Williams," and said he received at least $5,200,611 in federal funds.
CBS News Detroit reached out to two of Williams' attorneys for comment on Saturday afternoon but has yet to hear back. Online court records show a preliminary exam for him is scheduled for April 30.