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Detroit man pleads guilty in $590K COVID-19 fraud scheme

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Posted at 3:17 PM, Sep 11, 2020
and last updated 2020-09-11 15:17:27-04

DETROIT (WXYZ) — A Detroit man pleaded guilty to bank fraud and money laundering in a $590,000 COVID-19 fraud scheme, U.S. Attorney Matthew Schneider announced Friday.

Darrell Baker, 56, pleaded guilty to one count of bank fraud; Schneider said he attempted to obtain the money by defrauding a Pennsylvania financial institution in the issuance of a PPP loan.

He also pleaded guilty to one count of money laundering, the result of transactions with the fraudulent funds.

“My office and our law enforcement partners have no tolerance for frauds affecting programs designed to help our economy survive the COVID-19 pandemic," Schneider said. "We will prosecute such cases aggressively, and today’s guilty plea is an example of our commitment to holding accountable anyone fraudulently obtaining pandemic relief funds to line their own pockets.”

According to the plea agreement, Baker applied for and obtained a $590,000 PPP Loan on behalf of a purported business that he owns, called “Motorcity Solar Energy Inc.”

According to the plea documents, Baker submitted paperwork with his loan application representing that Motorcity Solar Energy Inc. had 68 employees and, in 2019 paid wages, tips, and other compensation totaling $2.8 million. All of these representations were in fact false. Motor City Solar Energy had no employees, no payroll expenses of any kind, and was not an operational business.

The plea documents state that Baker managed to withdraw approximately $172,000 of the $590,000 loan he obtained before Baker’s own financial institution froze the remainder, which was ultimately returned to Customer’s Bank. Baker used the funds he did obtain to purchase four cashier’s checks, and used the four checks to purchase two Cadillac Escalades, a Dodge Charger and a Hummer, prosecutors said.

The plea agreement requires Baker to forfeit these vehicles. As part of the plea agreement, Baker also agreed to the entry of a money judgment against him in the amount of $172,484.40, which represents the portion of the loan that Baker obtained before his fraud was uncovered and the balance of the loan frozen.

Sentencing is set for Jan. 14, 2021.

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