LOUISVILLE, Ky. (WDRB) — A candidate running for the District 5 seat on Louisville Metro Council is facing federal charges for allegedly trying to fraudulently obtain millions in COVID-19 relief funds.
In a news release, the United States Attorney's Office for the Western District of Kentucky said five people were arrested Friday in Kentucky, Indiana and Colorado "for their role in a scheme to fraudulently obtain approximately $1.6 million in COVID-19 relief funds."
Officials said a federal grand jury in Louisville returned an indictment charging 31-year-old Kaelynn Greene and 32-year-old Camden Newton with wire fraud, conspiracy to commit wire fraud, aggravated identity theft and money laundering.
The indictment also charges 39-year-old Betty Walker, also known as Betty Bailey, who is running for the Metro Council District 5 seat, 32-year-old Breanna Patterson and 34-year-old Jordan Greene with conspiracy to commit wire fraud.
According to officials, Kaelynn Greene and Newton engaged in a scheme to fraudulently obtain Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans through false statements on applications.
"As part of the Department of Justice’s new National Fraud Enforcement Division, this indictment begins the process of holding five fraudsters accountable for their theft of hard-earned taxpayer dollars," U.S. Attorney Kyle G. Bumgarner said in a news release.
They used either their own names, entities they created or stolen identities. Officials said Kaelynn Greene conspired with Walker, Patterson, Jordan Greene and others to recruit borrowers who were ineligible for PPP loans to submit fraudulent applications on their behalf.
Authorities claim the group falsely stated that borrowers operated businesses that did not exist and would have otherwise qualified them for loans. They also allegedly created fake tax forms that were submitted as part of the loan process.
Officials said the scheme resulted in more than 20 EIDL applications and more than 50 PPP applications being filed for ineligible borrowers.
This led to the disbursement of more than $850,000 in fraudulently obtained federal funds. Attempts to obtain more than $750,000 in additional loan proceeds were denied.
According to an indictment, the scheme by Walker and Katelynn Green between March 2021 and June 2022 was "to personally enrich themselves" by filing the applications for "their personal use and benefit and for the benefit of others."
In a PPP loan application, Kaelynn Greene allegedly filed for Walker and claimed in the application that the entity had $78,836 in gross income.
A loan application for $16,44 was disbursed in the name of Walker who then withdrew $2,500 for Kaelynn Greene.
Walker allegedly recruited other people for Kaelynn Greene to submit more PPP applications.
"These defendants allegedly took advantage of two federally funded programs designed to carry our country and its small businesses through unprecedented economic uncertainty by lying, cheating and stealing," Bumgarner said. "Their conduct will not be tolerated, and they will be aggressively prosecuted by this office."
Walker is scheduled Thursday for arraignment in federal court.
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