A Tennessee man admitted in federal court on May 1 to committing wire fraud by obtaining a CARES Act loan through false statements, according to the U.S. Attorney for the Western District of Virginia.
Paul Eugene Welborn Jr., age 67 and from Mountain City, Tennessee, pleaded guilty after prosecutors said he made misrepresentations when applying for a federal loan intended to help small businesses affected by the COVID-19 pandemic. The case was heard in Abingdon, Virginia.
The CARES Act, passed in March 2020, provided emergency financial assistance during the pandemic and allowed the Small Business Administration to issue loans up to $2 million for eligible small businesses. It also enabled advances of up to $10,000 within three days of an Economic Injury Disaster Loan application. According to court documents, Welborn founded a non-profit called Wings of Hope in 2011 but reported on his loan application that it had $2 million in gross revenue and more than twelve employees when it actually had no employees or significant revenue at the time. These claims led Wings of Hope to receive a $159,900 EIDL loan with a $10,000 advance on June 9, 2020.
Welborn used much of these funds for personal expenses at various retailers and transferred money between personal bank accounts. First Assistant United States Attorney Robert N. Tracci and Kareem A. Carter from IRS Criminal Investigation announced the plea agreement.
The Internal Revenue Service-Criminal Investigations and Department of Labor Office of Inspector General investigated this case while Assistant U.S. Attorney Whit Pierce is handling prosecution duties.
The U.S. Attorney for the Western District of Virginia promotes public safety and community well-being through crime prevention and outreach according to its official website. The office operates locations in Roanoke, Charlottesville, Abingdon, Lynchburg, Danville and Harrisonburg according to its official website and is part of the U.S. Department of Justice according to its official website. It handles federal prosecutions as well as civil litigation for the United States government according to its official website, covering western Virginia according to its official website. The office partners with federal, state and local law enforcement agencies on public safety efforts according to its official website.
On April 7 prior this year’s plea hearing date announcement was made regarding creation within Department Of Justice: Fraud Division focusing investigations & prosecutions against fraudulent activities targeting American people supporting President Trump’s Task Force To Eliminate Fraud led by Vice President J.D Vance aiming elimination misuse/waste/fraud across Federal benefit programs.
