Marietta Man Sentenced for COVID-19 Relief Scam

A Marietta man was sentenced for his involvement in a scheme to steal Paycheck Protection Program funds during the COVID-19 pandemic.

John Gaines, 59, was sentenced to five years and three months in prison, to be followed by three years of supervised release. Gaines was also ordered to pay restitution in the amount of $806,710. Gaines pleaded guilty to one count of money laundering in January.

Gaines worked with co-defendant Darrell Thomas and others to obtain a fraudulent PPP loan in the amount of $806,710 for a business called Gaines Reservation and Travel, which was found to have no employees or payroll expenses, according to a news release from the U.S. Attorney’s Office for the Northern District of Georgia.

Gaines is one of three recently sentenced for the scheme, including 42-year-old Teldrin Foster of Atlanta and 56-year-old Carla Jackson of Tucker. To date, a total of 23 individuals have been convicted and sentenced in connection with the fraudulent scheme, according to the news release.

"Foster, Gaines and Jackson, together with 20 other defendants who have already been sentenced for their participation in this criminal scheme, took advantage of a relief program designed to keep small businesses afloat during the COVID-19 pandemic," U.S. Attorney Ryan Buchanan said in the news release. "These defendants have been held accountable for depriving this program of funds desperately needed by some of the most vulnerable in our society. And their sentences send a clear message that fraud against the government will not be tolerated.”

Gaines provided Thomas with fabricated bank statements that reflected fake payroll deductions and after the application was approved, he directed payments to Thomas disguised as rent and payroll.

Jackson laundered some of the proceeds from Gaines’ fraudulent business loan, receiving over $300,000 in stolen PPP funds, the Justice Department reports.

Foster also worked with Thomas and others to fraudulently obtain a PPP loan between $700,000 and $850,000, for a total of more than $11 million, officials said.

Twenty other individuals pled guilty and have been sentenced. One defendant’s charges remain pending.

The case is being investigated by the Federal Bureau of Investigation and Internal Revenue Service.

Officials ask anyone with information about allegations of attempted fraud involving COVID-19 to report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 877-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form .