Eight people were sentenced for wire fraud from the COVID-19 pandemic. Those sentenced took money reserved for those who struggled during government shutdowns and spent it on personal expenses, according to the Department of Justice.
Frederick Smith, 56, of Cordova, Tennessee, was sentenced yesterday for his role in an eight-defendant scheme to defraud COVID-19 disaster relief programs (including the Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP) of over $17 million.
All eight defendants previously pleaded guilty to charges of wire fraud and have now been sentenced to a total of 96 months in prison and 45 months of home detention.
Court documents say the defendants obtained funds under the EIDL program and PPP by submitting false and fraudulent loan applications prepared by Flowers and others on behalf of businesses and entities that the defendants owned.
The group allegedly lied on the fund application about the entities’ number of employees, gross revenues, average monthly payroll, and more.
Sentencing information is below:
- Rodrick Flowers, 49, of Memphis, Tennessee, 58 months in prison;
- Frederick Smith, 56, of Cordova, Tennessee, 23 months in prison;
- Jarvys Jones, 40, of West Memphis, Arkansas, 12 months in prison;
- Mary Payne, 63, of Memphis, Tennessee, six months in prison, followed by five months of community confinement, followed by five months of home detention;
- Cleveland Wells, 67, of Memphis, Tennessee, one month in prison, followed by five months of home detention;
- LaTonya Herman, 46, of Memphis, Tennessee, one month in prison, followed by five months of home detention;
- Brian Mays, 41, of Olive Branch, Mississippi, 18 months of home detention; and
- Krystall Sherrod, 36, of Memphis, Tennessee, 12 months of home detention.
The defendants then used the loan funds for purposes not authorized by the EIDL program or PPP, including for personal expenses.
The PPP program provided funds to eligible small business owners to pay staff instead of laying them off during the first part of the COVID-19 pandemic.
Hundreds of billions of dollars were likely lost to fraud during the pandemic, according to an April 2025 report from the Government Accountability Office. As of late 2024, the Department of Justice has charged more than 3,000 people, companies, and other entities with fraud-related crimes.
Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division; Special Agent in Charge Joel Weaver of the U.S. Treasury Inspector General for Tax Administration (TIGTA); Special Agent in Charge Edwin S. Bonano of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); and Special Agent in Charge Karston Gaardner of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG) Dallas Regional Office made the announcement.
TIGTA, FHFA-OIG, and FDIC-OIG investigated the case. Trial Attorneys Ariel Glasner, David Hamstra, and Matthew Kahn of the Criminal Division’s Fraud Section are prosecuting the case.
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