An Oakland man and five others have been sentenced to federal prison for defrauding the COVID-19 Paycheck Protection Program, according to federal prosecutors.
Frank Mosley, 58, of Oakland, and his brother Reginald Mosley, 60, of Sacramento pleaded guilty to one count of conspiracy to commit bank fraud, along with men from Elk Grove, Roseville and Rocklin.
Frank Mosley was a tax enforcement officer for the city of Oakland and a former IRS revenue officer who conspired to submit fraudulent PPP loan applications to his co-conspirators, each of whom raked in more than $3 million, the U.S. Attorney’s Office said in a statement. Friday.
Mosley and his co-defendants stole pandemic relief funds intended to help businesses affected by the pandemic “for their own personal gain,” according to Special Agent Jon Ellwanger.
The Mosely brothers submitted fraudulent loan applications on behalf of Forward Thinking Inc., an entity they controlled in August 2020. They received more than $1 million in relief funds, and then Reginald Mosley recruited the co-conspirators who owned companies to submit additional fraudulent loan applications, who then provided kickbacks to the Mosleys for their assistance amounting to 15% of the money.
All of the defendants falsely stated that they had dozens of employees and hundreds of thousands of dollars in monthly payroll costs, but in reality had shell companies with no legitimate employees and no payroll costs.
They also all admitted to spending the money they received from the Paycheck Protection Program on personal expenses and investments, such as paying credit card bills or sending the money to family members.
The Mosleys were forced to admit that they also filed false tax returns to cover up their scheme. They received 30 months in prison. Their co-conspirators received sentences ranging from 12 to 18 months.
