Clifton did not respond to CNN requests for comment and his public defender declined to comment due to the pending status of the case.
Accusation: The loan was for a business that no longer existed.
Clifton first filed to create the Jazzy Jas LLC online clothing retail business in February 2019 and applied for the SBA loan for the company on July 24, 2020, according to the indictment obtained by CNN.
The problem? According to the indictment, the company no longer existed. It had been formally dissolved with the North Carolina Secretary of State months earlier in March 2020, but was effectively dissolved in September 2019.
To obtain funding, Clifton allegedly submitted a loan application on July 24, 2020, falsely claiming that Jazzy Jas LLC had generated $ 350,000 in revenue over a 12-month period prior to the pandemic, according to the indictment.
“CLIFTON specifically agreed to use the proceeds from the Jazzy Jas LLC loan ‘solely as working capital to alleviate the economic damage caused by the January 31, 2020 disaster,'” the indictment says.
A $ 150,000 loan was approved on August 8, 2020, and the indictment says the funds, minus a $ 100 fee, were deposited into Clifton’s credit union account about three days later.
The indictment states that Clifton used the previous existence of Jazzy Jas LLC to “exploit a federal loan program and obtain a significant sum of money.” The federal government seized approximately $ 50,000 in funds from Clifton’s credit union account in November, according to the indictment.
A grand jury first charged Clifton on February 17 with wire fraud in connection with a disaster benefit and fraud in connection with a major disaster or emergency benefits. If convicted, the press release indicated that the charges could carry a maximum of 30 years in prison each and a total of $ 1,250,000 in fines.
Clifton was released on $ 25,000 bond after his court appearance Monday, court records said.
US Attorney Wants Covid-19 Funds To Help The Right People
“At a time when our nation is grappling with the effects of the coronavirus pandemic and businesses are struggling to cope with the impact of COVID, scammers are seizing the opportunity to steal federal financial aid programs to line their own pockets.” wrote US Attorney Andrew Murray. in a statement sent to CNN.
“My office is working hard to uncover criminals trying to exploit the pandemic and steal funds intended for the economic recovery of businesses and communities throughout the Western District of North Carolina.”