A Macon business owner has been accused of defrauding the COVID-19 pandemic relief program by seeking more than $2 million, according to his indictment unsealed this week.
The indictment accused James Frank Austin Jr., who established the Austin Smith Center for Community Development , of bank fraud, money laundering and conspiring to commit wire fraud. Rosalend Way was indicted alongside Austin on two counts of conspiring to commit wire fraud and money laundering.
The business was supposed to be focused on community work by establishing “Shalom Zones” in many Macon locations.
Both submitted allegedly fraudulent applications for the Paycheck Protection Program, a program established during the pandemic that “provided forgivable loans to small businesses for job retention and other expenses,” the indictment said. They submitted those applications through Legacy Bank and Cross River Bank, as well as Kabbage, a service loan provider.
Way was arrested on Tuesday and Austin was arrested on Wednesday. Way was released on a $20,000 bond. Austin will appear in federal court Thursday for his first appearance.
Using federal loans for luxury cars
Both Way and Austin conspired to submit false loan applications and enrich themselves, according to the indictment. They did this through their community development business, but also the Propel Opportunity Fund, an investing company.
They submitted three applications seeking loans and got large sums of money from each, according to the indictment. On one application for the community development business submitted in 2020, Austin claimed he had 15 employees and an average monthly payroll of $654,515. He provided a 2019 tax form showing that he had 26 employees who were paid $648,908, and he was awarded a $654,315 loan.
Also in 2020, the two defendants submitted an application for Propel Opportunity Fund and claimed they had 18 employees with an average monthly payroll of $420,558, according to the indictment. They attached a document falsely claiming they had paid more than $4.9 million in wages in 2019, and were awarded more than $1 million for that application.
A third application, submitted for the opportunity fund, falsely claimed they had a monthly payroll of $149,000 and nearly $4.9 million in wages in 2019, according to the indictment. They got $372,500 through that application.
The total amount they got through the loans was about $2.08 million, according to the indictment.
The IRS alleges neither company ever filed the tax forms that were attached to the applications, and the bank statements for both companies didn’t match up with the payroll claims.
The indictment says both suspects used the money to buy high-value cars. Austin obtained a check for $30,880.62 to give to Mercedes-Benz, which was intended to pay off a loan taken by Way. Another check obtained by Austin amounted to $119,840 to purchase a Bentley.
The indictment says they must forfeit their cars if they are convicted, but details of restitution or potential prison sentences were unclear.
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