The CARES Act provided COVID-19 relief to many Florida businesses to help them in staying afloat during the pandemic. For example, the Small Business Administration offered Economic Injury Disaster Loans (EIDL) to small businesses, agricultural cooperatives, and private nonprofit organizations that struggled to meet their payroll expenses during the initial lockdown periods. These loans were expressly targeted at active, existing businesses that could not obtain credit elsewhere.

But over the past several months, the U.S. Department of Justice has charged a number of individuals with fraudulently obtaining EIDL funds. These cases typically involve allegations that these individuals made false statements in connection with loan applications. These are serious charges, often including wire fraud and money laundering, which carry serious jail time upon conviction.

Government Accuses Harding of Filing Loan Applications for “Dormant” Businesses

On December 7, 2022, the U.S. Attorney’s office in Jacksonville obtained what might be the highest-profile indictment yet in a Florida CARES Act prosecution. A federal grand jury returned an indictment against Joseph Harding, a member of the Florida House of Representatives. According to a Justice Department press release, the indictment charged Harding with wire fraud, money laundering, and making false statements.

More specifically, the government accused Harding of defrauding the Small Business Administration (SBA), which oversees the EIDL program. The indictment alleged that in December 2020 Harding filed EIDL applications on behalf of two business entities that he controlled, The Vak Shack Inc and Harding Farms LLC. In those applications, Harding alleged that The Vak Shack had four employees and $420,000 in revenues just prior to the start of the COVID-19 pandemic, when in fact that business was “dormant” and had no employees or business activities at the time. Similarly, the indictment alleged that the EIDL application for Harding Farms LLC declared that the business had $392,000 in revenues and 2 employees prior to the pandemic, when in fact it was “dormant” and had no gross revenues or employees in early 2020.

Altogether, the indictment alleged Harding obtained $150,000 in EIDL funds for the two “dormant” business entities.

It is important to emphasize that an indictment is merely a statement of allegations and not proof of a defendant’s guilt. Harding’s case is currently scheduled for trial in federal court in January 2023. Harding resigned his seat in the Florida House of Representatives after the indictment was announced. In his resignation letter, he said that the upcoming trial required “my complete focus.”

Harding pleaded not guilty to the criminal charges indictment. He also indicated in a social media post that he had “repaid every penny” of the EIDL loans and planned to “tell my story” at a later date.

Contact a Florida CARES Act Fraud Lawyer Today

The fact that the federal government indicted a high-profile public official demonstrates that nobody is safe from the federal government’s ongoing war on COVID fraud. So if you are currently under investigation or are facing charges and need legal advice and representation from a qualified Tampa criminal defense attorney, contact Trombley & Hanes today to schedule a consultation.