Former Eagles Running Back Pleads Guilty to COVID-19 Fraud Charges

Former Eagles running back, Wendell Smallwood Jr., a Wilmington, DE-area native, pleaded guilty on Friday to fraud and conspiracy charges tied to COVID-19 disaster relief programs. The 30-year-old former NFL star entered a plea of guilty to felony wire fraud, conspiracy to commit wire fraud, and conspiracy to defraud the Internal Revenue Service in a Wilmington court. He was ordered to return to court in May for his sentencing. The charges carry a maximum of 50 years in prison. However, defendants with no prior criminal record like Smallwood are rarely given such steep sentences when they plead guilty. The charges also carry the potential for hundreds of thousands of dollars in fines, and he will likely have to make restitution for the amount of money he defrauded from the federal government.

What is COVID-19 pandemic relief fraud? 

During the 2020 COVID-19 pandemic, the federal government enacted several relief programs to help small businesses remain solvent during the shutdown. Small businesses could apply for forgivable loans to help make their payroll and pay for other expenses. The federal government disbursed trillions of dollars in aid to help these businesses weather the economic shutdown brought about by the pandemic.

Under the program, prosecutors alleged that Smallwood received just under $50,000 which they alleged were “fraudulently” disbursed to the running back. According to the complaint, prosecutors allege that the funds were not spent on business expenses and were partially withdrawn as cash from ATMs in Delaware and other states.

How did Smallwood get this money? He essentially lied to the federal government about the business that was applying for the loan. Prosecutors accuse the defendant of submitting false information to the Paycheck Protection Program (PPP) which offered forgivable loans to cover business expenses like payroll, rent, and utilities.

According to federal prosecutors, the complaint states that Smallwood conspired with another person to submit fraudulent applications in the names of 13 separate sole proprietors. The applications either falsely stated that a non-existent business existed or inflated the business’s operations. The complaint alleges that the scheme generated $269,000 in proceeds.

Prosecutors say that Smallwood and his coconspirator arranged kickbacks from the sole proprietors receiving the loan proceeds. Prosecutors accuse Smallwood of receiving kickbacks ranging from $4,000 to $12,000. Prosecutors say that Smallwood received a total of $81,000 in kickbacks for his part in the scheme.

Smallwood is also accused of a tax fraud conspiracy in which prosecutors claim he recruited tax filers in Delaware and prepared tax documents that included discrepancies concerning things like income. The IRS issued around $110,000 in tax refunds tied to these fraudulent applications.

Talk to a White Collar Criminal Defense Lawyer Today 

Michael W. Modica represents the interests of Wilmington, DE residents who are facing charges related to white-collar crimes. These include crimes like fraud and embezzlement. We can help take control of your case and ensure a vigorous defense to the charges. Call our Wilmington criminal defense lawyers today to schedule an appointment, and learn more about how we can help.

Source:

delawareonline.com/story/news/2024/12/20/former-eagles-running-back-wendell-smallwood-delaware-native-plea-covid-fraud-case/77090766007/