$400,000 in COVID-19 relief funds sent to NC man who lied on his application, feds say
A 31-year-old man in North Carolina received more than $400,000 in loans doled out by the U.S. government to help businesses struggling during the coronavirus pandemic by lying on his paperwork, federal prosecutors say.
David Christopher Redfern was charged Tuesday with wire and bank fraud, prosecutors said in a news release.
Redfern applied for two Economic Injury Disaster Loans and one Paycheck Protection Program loan under the Coronavirus Aid, Relief and Economic Security Act passed by Congress earlier this year, court filings show.
The loans were for Wilder Effects LLC, a “New Single-Family Housing Construction” business based in Trinity — a city of roughly 6,000 people about an hour northeast of Charlotte, according to information released by the U.S. government. The company was formed on Jan. 13, 2020, court filings show.
Redfern was approved for a $2,000 economic injury loan in April and a $403,120 PPP loan in June, a federal agent said in an affidavit supporting the criminal charges. His second request for an economic injury loan was denied due to inconsistencies on his application.
Prosecutors said Redfern lied on all of his applications.
He claimed in his first request for an economic injury loan that Wilder Effects had just two employees and net $21,000 in gross revenue in the 12 months before the COVID-19 pandemic hit, court filings show.
But when Redfern submitted his second request a month later, he claimed Wilder Effects employed nine people and took in $30,000 over the previous year, according to the affidavit.
Redfern also claimed in a separate application for a PPP loan that his business needed $410,000 to support the payroll of 20 employees, the affidavit states. He reportedly submitted fake IRS and bank documents to support that claim.
Prosecutors said Redfern then tried to withdraw the loan proceeds in cash or transfer them to his personal bank account.
But his account was frozen on “suspected fraud alerts,” allowing law enforcement to recover $402,000 in COVID-19 relief loans Redfern had fraudulently obtained, according to Tuesday’s news release.
Redfern was arrested Tuesday in the Middle District of North Carolina, court filings show.
He was released on certain conditions, including submitting to a probation officer, surrendering his U.S. passport and agreeing to a no-contact order with several individuals deemed a victim or witness in the investigation.
