CHARLESTON, W.Va. — A Charleston man was ordered today to pay restitution and sentenced to federal probation for wire fraud.
According to the U.S. Attorney’s office on Thursday, Malik Breckenridge, 26, of Charleston, was ordered to pay $41,666 in restitution and sentenced to five years of federal probation, including eight months on home detention, for wire fraud.
According to court documents and statements made in court, Breckenridge admitted to a scheme to defraud the Paycheck Protection Program (PPP) of over $41,666 in COVID-19 relief loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The U.S. Attorney’s office further stated that between April 4, 2021, and August 10, 2021, Breckenridge applied for and obtained two PPP loans on behalf of Malik Breck, his purported business. Malik Breck was not a registered business entity in West Virginia and was not engaged in substantial, legitimate business activity on or before February 15, 2020. Breckenridge admitted that he falsely stated that Malik Breck was established in 2014 and operating on February 15, 2020. Breckenridge further admitted that he submitted a false Internal Revenue Service (IRS) Form 1040, Schedule C Profit or Loss from Business reporting that Malik Breck had earned $180,489 in gross income during 2019.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic, a release said. One source of relief provided by the CARES Act was the authorization of forgivable loans to small businesses for job retention and certain approved expenses, through the PPP. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.
A Florida lender processed both of Breckenridge’s PPP loan applications. Each loan totaled $20,833. Breckenridge admitted that he later applied to have both PPP loans forgiven even though he had not spent the loan proceeds on permissible business expenses. The SBA forgave the loans on August 8, 2021.
United States Attorney Will Thompson made the announcement and commended the investigative work of the West Virginia State Police and the United States Secret Service.