Georgia man spent COVID loans on luxury shopping: Feds

A 38-year-old Georgia man filed bogus applications for COVID-19 relief funds on behalf of a non-existent barber shop and spent the money in less than a month – while on bail in a unrelated drug, federal prosecutors mentioned.

Now he is going to jail.

Rodriquez Deonte Redding, also known as Dreek, was sentenced to seven years in prison for drug trafficking, money laundering and wire fraud in the Northern District of Georgia, the U.S. Attorney’s Office said in a statement. January 25 press release.

“It is shocking that, while charged with drug trafficking and money laundering, Redding had the audacity to defraud a program intended to help people and businesses struggling to survive during the pandemic in order to fund her luxury shopping sprees,” U.S. attorney Kurt R. Erskine said in the statement.

A defense attorney appointed to represent Redding did not immediately respond to McClatchy News’ request for comment on Wednesday, January 26.

Congress passed the Paycheck Protection Program as part of a federal relief package to help small businesses struggling to stay afloat during widespread shutdowns caused by COVID-19. More than 11.4 million PPP loans totaling $790 billion were issued in 2020 and 2021, according to federal data.

Redding, who is from Atlanta, reportedly received two PPP loans of $20,833 each in April and May of last year.

Prosecutors said the investigation dates back to 2010, when Redding was first suspected of dealing drugs in the Atlanta area. They said he served as a courier for cocaine deliveries and was known to handle bags of cash. Security cameras at some banks even spotted him depositing the money, the government said.

The money was allegedly laundered through a series of purchases involving luxury cars, according to the US attorney’s office.

“In order to further conceal his unexplained wealth, he convinced his mother and elderly grandmother to purchase the cars in their name, entwining them in his crimes,” prosecutors said.

A grand jury indicted Redding in September 2018 and he was arrested soon after, but he bailed and was released. As the drug trafficking case made its way through the courts, prosecutors said, Redding began applying for PPP loans.

Claiming to own a hair salon, Redding allegedly submitted doctored tax returns to qualify for the program. The government said it received $41,666 in PPP loans as a result – which it blew out of luxury shopping sprees in a month.

“Instead of spending PPP money on payroll for employees or other business expenses, he spent thousands of dollars on both rental cars and shopping, including at Prada, Louis Vuitton and Saks Fifth Avenue. “, prosecutors said.

Redding is among hundreds of people charged with misusing COVID-19 relief funds.

In February 2021, a 24-year-old woman in Charlotte, North Carolina, was accused of lying to obtain nearly $150,000 in PPP loans that prosecutors said she spent at more than two dozen places to buy anything from mattresses and shoes to car parts, diamonds and designer bags.

Redding pleaded guilty to conspiracy to distribute a controlled substance and money laundering in June, shortly before the government uncovered the PPP loan fraud. He pleaded guilty to wire fraud charges on January 21.

The judge added an additional year and three months for the COVID-19 fraud to his sentence, resulting in a seven-year sentence with five years of supervised release.

He was also ordered to pay $46,666 in restitution to the US Small Business Administration.

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Hayley Fowler is a reporter for The Charlotte Observer, covering breaking news and real-time news across North and South Carolina. She holds a journalism degree from the University of North Carolina at Chapel Hill and previously worked as a legal reporter in New York City before joining the Observer in 2019.