Capitol Heights man pleads guilty in COVID-19 fraud scheme that stole over $1 million

A Capitol Heights, Maryland, man pleaded guilty Friday to defrauding the federal government of more than $1 million in COVID-19 relief funds, according to prosecutors.

The U.S. Attorney’s Office for the District of Maryland said that 25-year-old Jerry Phillips was convicted on charges of federal wire fraud conspiracy, aggravated identity theft and illegal possession of a machine gun.

Phillips’ offenses stem from his role in a scheme carried out with his brother, Jaleel, where they illicitly obtained more than $1 million in COVID-19 CARES Act Paycheck Protection Program loan applications (PPP), Economic Injury Disaster loan applications (EIDL) and unemployment insurance claims.

Prosecutors said that the brothers and another co-defendant, who wasn’t named, applied for the federal loans by creating fake identities and businesses while also using information from defunct businesses and other peoples’ real personal information.

During the scheme that stretched from March 2020 to February 2022, Phillips admitted to submitting fraudulent PPP and EIDL loan applications with fake identities as well as using the personal information of more than 20 people.

Funds were deposited into the banks accounts tied to the fake identities, which prosecutors said that Phillips used to buy a 2020 Chevrolet Camaro that cost nearly $66,000 and was registered in his name.

At least 25 fake driver’s licenses from multiple states were recovered from Phillips’ home, as were four “ghost guns” — one of which had been illegally modified to be fully automatic.

Phillips could serve over 40 years in federal prison for his offenses. His sentencing hearing is scheduled for May 16.

Matthew Delaney

Matt Delaney is a digital web writer/editor who joined WTOP in 2020.

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